Absence of conflict of interest.
Citation
Highlights
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The study's objective was to examine the impact of the 2004 California Paid Family Leave (CA-PFL) program on young women’s employment and wages. The other chapters of the study are linked here:
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Chapter 2: Moving Up the Ladder: Impact of Working from Home on Career Mobility
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The study used a “triple difference-in-difference” design to estimate the impact of the CA-PFL on young women's employment and wages. The author used the Quarterly Workforce Indicators dataset, which includes data on employment, earnings, worker demographics, and industry. Because take up of paid leave under CA-PFL is substantially higher among young women than among young men or older women, the author focuses on employment and wages of women verses men, and young women versus older women.
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The study suggested that the CA-PFL was associated with a decrease in employment for young women relative to both men and older women, and a decrease in wages relative to older women but not men.
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This study receives a low evidence rating because the analysis uses group-level
data (aggregated by gender or age, time, industry, and county) but the author did not provide information on changes in the composition of individuals in these groups. This means we are not confident that the estimated effects are attributable only to the CA-PFL program; other factors may have contributed.
Intervention Examined
California Paid Family Leave Program (CA-PFL)
Features of the Intervention
In 2004, less than 10 percent of U.S. private sector employees had access to paid family leave. Likewise, in California, although some private sector employers offered paid leave and some women could access paid temporary disability leave for childbirth, overall access was limited.
The California Paid Family Leave (CA-PFL) program, introduced in July 2004, allowed eligible new mothers up to 12 weeks of paid leave and new fathers up to 6 weeks of paid leave at a 55% wage replacement rate. Eligible employees had to be working at the start of the leave and have earned $300 in any quarter in the five months before applying for paid leave. The program is funded by a payroll tax on all employees. Although all new parents (by birth or adoption) are eligible for CA-PFL, 70 percent of claimants are women of childbearing age.
Features of the Study
The study assesses whether the CA-PFL lowered employment or earnings of young women relative to young men or older women, two groups that were substantially less likely to apply for paid leave. Since employee leave taking may raise employer costs (e.g., through administrative burden or work disruptions), employers might respond to CA-PFL by either reducing their hiring of or wage offers to young women, relative to men or older women. The study used a triple difference-in-difference design to estimate the impact of the CA-PFL on young women's employment and wages, estimating the impact by comparing outcomes on three dimensions: (i) by gender (women vs. men) or by age (younger women vs. older women); (ii) by time (before vs. after 2004): and (iii) by industry (the law’s impact varied by industry based on the extent to which the industries offered paid leave before 2004). Using data from 1991 through 2015, for the analysis by gender the author compares outcomes of women (aged 14-44) and men (aged 14-44) with a sample of 2,424,820 observations; for the analysis among women by age, the author compares outcomes of younger women (aged 14-34) and older women (aged 35-44) with a sample of 1,227,058 observations.
The author used the Quarterly Workforce Indicators dataset, which includes data on employment, earnings, worker demographics, and industry. Grouping the data by time, county, industry, gender, and age, the author used a statistical model to compare the average employment and wages of women verses men, and younger women versus older women, before and after the CA-PFL program.
Findings
Employment
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The study suggested that the CA-PFL was associated with a decrease in employment for women relative to men, and for younger women relative to older women.
Earnings and Wages
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The study suggested that the CA-PFL was associated with a decrease in wages for younger women relative to older women, but found no clear evidence of a change in wages for women relative to men.
Considerations for Interpreting the Findings
The author uses aggregated data rather than individual-level data, but did not provide the necessary information to assess the level of migration into and out of these groups. Because changes in group composition may be related to employment and wages, we cannot be certain that the estimates reflect only the impact of CA-PFL.
Causal Evidence Rating
The quality of causal evidence presented in this report is low because the author did not provide information on sample migration and composition at the level at which the data were grouped. This means we are not confident that the estimated effects are attributable to the California Paid Family Leave (CA-PFL) program; other factors are likely to have contributed.