Long-Term Effects of California's Paid Family Leave on Mothers' Employment

Background & Purpose: Upon the arrival of a new life, mothers often encounter significant changes in their employment, which can potentially have long-term influences on their careers. Paid Family Leave is a potentially powerful policy aimed at mitigating employment disruptions after childbirth. After the first state-paid family leave law was implemented in California (CA-PFL) in July 2004, previous studies have documented its short-term positive impact on maternal employment (Baum and Ruhm, 2016; Rossin-Slater et al., 2013). However, relatively little is known about its long-term impacts, specifically whether the positive short-term impact persists over time. One exception is Bailey et al. (2019), which found negative long-term effects among first-time mothers, but only when focusing on those who gave birth in Q3 2004—when awareness of the policy was low. The current paper examines the long-term impacts of CA-PFL on mothers' employment by expanding the study sample to include those who gave birth in the years following the policy implementation.

Methods: Data from the Survey of Income and Program Participation Panels 2001, 2004, 2008, 2014, and 2018, covering the period from October 2000 through December 2019, are utilized. The main sample consists of women who gave birth in California from 2001 to 2009 (N=2,807 births, 112,037 mother-birth-month observations). I use an event-study specification to compare the employment outcomes of mothers who gave birth after the implementation of CA-PFL (July 2004) to those who gave birth before the policy, for each year following their childbirth up to 10 years, compared to the pre-birth level.

Results: Preliminary results suggest that statistically significant positive effects are only present in the short term, particularly in the first year after childbirth. However, these effects fade over time, with no significant impact observed in the medium and long term. The positive short-term effects are particularly pronounced among first-time mothers compared to their counterparts with older children.

Conclusions & Implications: Preliminary findings confirm the short-term employment effect of CA-PFL, while its effects do not persist in the long run. This finding differs from Bailey et al. (2019), suggesting that the policy's impact immediately after implementation might differ from when the policy becomes familiar to both workers and employers. Elements of PFL that support women’s long-term employment after childbirth warrant further discussion.