Paid Leave Pays Off: The Effects of Paid Family Leave on Firm Performance
Charles A. Dice Center Working Paper No. 2019-29
67 Pages Posted: 22 Nov 2019 Last revised: 12 Jan 2021
Date Written: December 25, 2020
We explore how lowering labor market frictions for female workers affects corporate performance. Using the staggered adoption of state-level Paid Family Leave acts, we provide causal evidence on the value created by relieving frictions to accessing female talent, for private and public firms. Reduced turnover and an increase in female leadership are potential mechanisms that contribute to performance gains. Across specifications, our estimates indicate that treated establishments’ productivity increases by about 5% relative to neighbor control establishments. The treatment effect is larger when workers are in less religious counties and in those with more women of childbearing age.
Keywords: PFL, Labor Force Participation, Gender, Diversity, Talent Allocation, Firm Performance
JEL Classification: J16, J22, J24, J32, J78, M14, M51
Suggested Citation: Suggested Citation