The Long-Term Effects of California's 2004 Paid Family Leave Act on Women's Careers: Evidence from U.S. Tax Data

42 Pages Posted: 30 Oct 2019 Last revised: 4 Jul 2021

See all articles by Martha J. Bailey

Martha J. Bailey

University of Michigan at Ann Arbor - Department of Economics

Tanya Byker

Middlebury College

Elena Patel

University of Utah - Department of Finance

Shanthi Ramnath

Federal Reserve Bank of Chicago

Multiple version iconThere are 2 versions of this paper

Date Written: October 2019

Abstract

This paper uses IRS tax data to evaluate the short- and long-term effects of California’s 2004 Paid Family Leave Act (PFLA) on women’s careers. Our research design exploits the increased availability of paid leave for women giving birth in the third quarter of 2004 (just after PFLA was implemented). These mothers were 18 percentage points more likely to use paid leave but otherwise identical to multiple comparison groups in pre-birth demographic, marital, and work characteristics. We find little evidence that PFLA increased women’s employment, wage earnings, or attachment to employers. For new mothers, taking up PFLA reduced employment by 7 percent and lowered annual wages by 8 percent six to ten years after giving birth. Overall, PFLA tended to reduce the number of children born and, by decreasing mothers’ time at work, increase time spent with children.

Suggested Citation

Bailey, Martha Jane and Byker, Tanya and Patel, Elena and Ramnath, Shanthi, The Long-Term Effects of California's 2004 Paid Family Leave Act on Women's Careers: Evidence from U.S. Tax Data (October 2019). NBER Working Paper No. w26416, Available at SSRN: https://ssrn.com/abstract=3476496

Martha Jane Bailey (Contact Author)

University of Michigan at Ann Arbor - Department of Economics ( email )

611 Tappan Street
Ann Arbor, MI 48109-1220
United States

Tanya Byker

Middlebury College ( email )

Middlebury, VT 05753
United States

Elena Patel

University of Utah - Department of Finance ( email )

David Eccles School of Business
Salt Lake City, UT 84112
United States

Shanthi Ramnath

Federal Reserve Bank of Chicago ( email )

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