Effect of State Parental Leave Policies on Parents' Subjective Well Being in the United States

Background and Purpose

I examine the effect of paid parental leave policies – provisions that allow parents to take job-protected leave on account of childbirth and other activities related to children’s well-being, such as taking care of a sick child or attending school events – on the subjective well-being of working parents. The ability to take leave while maintaining job continuity and without compromising economic security or career progression, has become increasingly important, with at least one parent working in 88% of the 34.4 million families with children and with over 70% of all mothers participating in the US labor force.

A number of well-designed studies have investigated the effect of paid parental leave policies on related measures of well-being, such as maternal employment and income, maternal and child health, and fathers’ involvement, but have not found uniform effects across these different measures.  To my knowledge, there is no existing published work that has investigated the effect of parental leave policies on parents’ subjective well-being in the United States, while comparable international evidence is preliminary and inconclusive. The study is further motivated by the renewed emphases on using subjective measures to describe well-being and to evaluate policies.

Methods

I use data from the American Time Use Survey (ATUS) Well Being modules 2012- 2013 and Leave Module 2011, combined with state level policy data. I employ a modified difference-in-difference design suitable for identifying effects when the data has individual and geographic variation but no longitudinal variation and when focal policies may be correlated across states.  The identification strategy utilizes exogenous variation across states with respect to three kinds of leave policies –Temporary Disability Insurance  that can be utilized by new mothers to take paid time off, Paid Family Leave Insurance that can be used for bonding and care of ill children and labor policies allowing parents time -off work to attend children’s school related events, along with individual variation in eligibility for each policy, to compare the difference in well-being between eligible and control groups, in policy states compared to non-policy states.

Results

I find no effect of state parental leave policies on subjective well-being for parents overall, but positive effects for unmarried mothers and parents with low educational attainment. Results also tend to vary by the age of child and age of parent, with negative effects observed for parents in their 30s with school age children.

Conclusion and Implications

I conclude that for parents overall, current paid parental leave policies in the US are inadequate for any significant effect on parents’ wellbeing. However, they do improve the wellbeing of the most disadvantaged parents. These results confirm expectations set by prior research and strengthen the argument in favor of implementing paid parental leave policies in the US. I also find that the effects of such policies depend on where parents are in life and how old their children are –a finding in line with theory and common experience, indicating a lack of one-size-fits all solutions when it comes to parental leave.