It’s a rare occurrence for a liberal media outlet to publish anything but laudatory articles about government-run paid leave programs. That’s why I was shocked this week to read the Washington Post article, “Do paid family leave policies help fix the gender pay gap? This study found the opposite.” The article opens by explaining:
Paid family leave policies are often touted as a way to fix the nation’s gender pay gap. By encouraging women to take time off work in the short term, rather than leave the labor force entirely, supporters argue, paid family leave policies should ultimately help women’s careers.
But in a new study, economists have found little evidence of this.
The full study can be found here. Led by University of Michigan economics professor Martha Bailey, the research team analyzed the effects of California’s paid leave program by comparing employment data on mothers who had children before and after its implementation. It concluded that:
Although the Act was modest relative to typical paid leave policies in European countries, we find its implementation led to statistically significant and economically large declines in the employment and wage earnings of new mothers. For this group, employment fell by 7 percent and annual wage earnings fell by 8 percent over a decade. In addition, the policy does not appear to have led to greater attachment to pre-birth employers.
This decline in employment and wages was substantial not only at the societal level, but also at the individual level:
Cumulatively, new mothers with access to paid leave under California’s 2004 Paid Family Leave Act could expect to receive around $1,833 in wage replacement for one year but approximately $25,681 lower earnings over the next decade, for a net 10-year loss of $24,000.
These findings cast serious doubt on a central argument for a traditional paid leave program. While there are studies suggesting that paid leave has positive effects on women’s employment (indeed, I’ve cited them myself!), the new research underscores that it would be unwise to optimistically assume that these effects will necessarily materialize.
The study is therefore yet another reason to favor a cautious, conservative approach to paid leave. Fortunately, Independent Women’s Forum has already outlined several alternative approaches to paid parental leave that fit this bill.