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Worker and Employer Responses to Paid Family Leave Policies

Paper Session

Saturday, Jan. 5, 2019 10:15 AM - 12:15 PM

Hyatt Regency Atlanta, Hanover B
Hosted By: Labor and Employment Relations Association
  • Chair: Brad Hershbein, W.E. Upjohn Institute for Employment Research

Paid Family Leave and Employer Skill Demand: Evidence from Job Postings

Marcus Dillender
,
W.E. Upjohn Institute for Employment Research
Brad Hershbein
,
W.E. Upjohn Institute for Employment Research

Abstract

A growing number of states and local governments have begun to consider and adopt paid family leave policies, which allow workers to maintain some portion of their wages while caring for an ill family member or new child. These legislative policies often have broader coverage than company leave policies, which tend to be concentrated among more-skilled workers. Although emerging research has shown that legislative leave policies increase take-up of leave and can have short-term positive impacts on employment and wages, there has been little work on how this mandated benefit may change employer behavior or job dynamics. Paid family leave may raise the cost of labor by affecting adjustment costs of firms (through reassignment of tasks of workers on leave) or reduce it by affecting employer morale, turnover, and productivity, and these forces likely vary across employment contexts. Using recent state paid leave policy changes in New Jersey, Rhode Island and a near-universe of electronic job postings, we employ difference-in-differences and triple differences methods to identify the impact of paid family leave policies on advertised skill requirements of job openings. Our approach allows us to investigate the heterogeneity by industry and occupation suggested by theory. We find that the paid family leave policies raised advertised education, experience, and specific skill requirements, and that these increases are stronger for lower-skilled and heavily female occupations.

The Long-Run Effects of Wage Replacement and Job Protection: Evidence from Two Maternity Leave Reforms in Great Britain

Jenna Stearns
,
University of California-Davis

Abstract

This paper examines the effects of maternity leave coverage on women’s employment outcomes and career trajectories in Great Britain using data from the British Household Panel Survey. Using a difference-in-differences identification strategy and two changes to the national maternity leave policy, I distinguish between the effects of expanding access to wage replacement benefits and the additional effects of providing job protection benefits.

The Effect of Maternity Leave Extensions on Firms and Coworkers

Yana Gallen
,
University of Chicago

Abstract

While a large literature is devoted to understanding the impact of maternity leave on children's outcomes and the careers of women, less is known about the consequences of maternity leave at the workplace. This paper studies the effects of maternity leave on firms and coworkers by examining a 2002 Danish reform which increased the length of parental leave by 22 weeks. The timing of the policy change gives random variation in the length of leave available to women who gave birth around the time of the reform. I find no detectable effect of the reform on the earnings or promotions of coworkers in any of the five years after the reform (point estimates are about $100) and can reject differences in yearly earnings larger than $425 overall and differences larger than $280 for female coworkers. While there are some costs for coworkers in the same occupation as women who give birth in the sample period, these costs are 1-1.5 percent of earnings. I also find evidence that the reform increases the probability of firm shut-down by about two percentage points five years after the reform, concentrated among relatively small firms. Conditional on survival, I find no impact of the reform on firm value added.

Unequal Access to Paid Family Leave: The Role of Employers

Sarah H. Bana
,
University of California-Santa Barbara
Kelly Bedard
,
University of California-Santa Barbara
Maya Rossin-Slater
,
Stanford University
Jenna Stearns
,
University of California-Davis

Abstract

There are substantial differences in paid family leave (PFL) take-up across industries and income categories in California. This paper examines the relationship between firm wage premiums and the share of employees who take leave. Are firms that pay relatively higher wages more or less conducive to taking PFL? The answer to this question is theoretically ambiguous. On one hand, workers at better-paying firms face a higher opportunity cost of taking leave. On the other hand, higher-paying firms-- which tend to also be more productive-- may view their wage setting policies as complements to creating an environment conducive to leave-taking. Using administrative data, we find that men and women employed at firms that pay relatively high wages are more likely to take up PFL for both bonding with a new child and to care for an ill family member. This effect holds over the entire first decade of PFL in California. However, conditional on taking leave, the duration of leave for those who work at higher-paying firms is lower. This suggests that employment at a high-paying firm may nudge marginal employees into taking PFL.
Discussant(s)
Eric Chyn
,
University of Virginia
Tanya Byker
,
Middlebury College
JEL Classifications
  • J0 - General