Paid Leave Pays Off: The Effects of Paid Family Leave on Firm Performance

61 Pages Posted: 11 Sep 2020 Last revised: 18 Nov 2021

See all articles by Benjamin Bennett

Benjamin Bennett

Tulane University - A.B. Freeman School of Business

Isil Erel

Ohio State University (OSU) - Department of Finance; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

Léa H. Stern

University of Washington - Michael G. Foster School of Business

Zexi Wang

Lancaster University

Multiple version iconThere are 2 versions of this paper

Date Written: September 2020

Abstract

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.

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Suggested Citation

Bennett, Benjamin and Erel, Isil and Stern, Lea H. and Wang, Zexi, Paid Leave Pays Off: The Effects of Paid Family Leave on Firm Performance (September 2020). NBER Working Paper No. w27788, Available at SSRN: https://ssrn.com/abstract=3687944 or http://dx.doi.org/10.2139/ssrn.3687944

Benjamin Bennett (Contact Author)

Tulane University - A.B. Freeman School of Business ( email )

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Isil Erel

Ohio State University (OSU) - Department of Finance ( email )

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National Bureau of Economic Research (NBER) ( email )

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Lea H. Stern

University of Washington - Michael G. Foster School of Business ( email )

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Zexi Wang

Lancaster University ( email )

Lancaster University Management School
Bailrigg
Lancaster, LA1 4YX
United Kingdom

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