The Effects of Paid Family Leave in California on Labor Market Outcomes

Abstract Using data from the 1997 cohort of the National Longitudinal Survey of Youth (NLSY‐97), we examine the effects of California's paid family leave program (CA‐PFL) on mothers’ and fathers’ use of leave during the period surrounding child birth, and on the timing of mothers’ return to work, the probability of eventually returning to prechildbirth jobs, and subsequent labor market outcomes. We estimate multivariate difference‐in‐differences regression models that compare changes in the outcomes for new California parents before and after the enactment of CA‐PFL to those for corresponding parents in control states. Our results suggest that CA‐PFL raised leave use by almost five weeks for the average covered mother and two to three days for the corresponding father. Maternal leave‐taking appears to increase in the quarter before the birth and to extend through the two quarters after it. Paternal leave‐taking rises fairly quickly after the birth and is short‐lasting. Rights to paid leave are also associated with higher work and employment probabilities for mothers nine to 12 months after birth, probably because they increase job continuity among those with relatively weak labor force attachments. We also find positive effects of California's program on hours and weeks of work during their child's second year of life.