Does Paid Family Leave Improve Household Economic Security Following a Birth? Evidence from California

Abstract

Many policy makers, scholars, and advocates expect that paid family leave programs will improve household economic security in the period following a birth. Yet empirical evidence of this relationship remains limited. To build evidence in this area, this study draws on 2000–2013 American Community Survey data and a quasi-experimental design to estimate the influence of California’s paid family leave program (CA-PFL) on mothers’ risk of poverty and household income following a birth. Among mothers of 1-year-olds, results suggest that CA-PFL decreases risk of poverty in the prior year by an estimated 10.2 percent and increases household income over the same period by an estimated 4.1 percent. Gains concentrate among less-educated and low-income single mothers, who tend to have few other supports for combining employment and caregiving. Findings suggest that paid family leave can be an effective policy option to bolster economic security when children are young.