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Paid family leave good for women — and business — study finds

Thursday, January 26, 2012  
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Providing paid family leave to workers leads to positive economic outcomes not only for working families, but for businesses and the public, too, according to a new study by the Center for Women and Work at Rutgers University.

Women who use paid leave are far more likely to be working 9 to twelve months after a child’s birth than those who do not take any leave, according to the study, "Pay Matters: The Positive Economic Impacts of Paid Family Leave for Families, Businesses and the Public,” commissioned by the National Partnership for Women & Families, with support from the Rockefeller Foundation. These women also report increases in wages from pre- to post-birth.

"While we have known for a long time about the maternal and infant health benefits of leave policies, we can now link paid family leave to greater labor force attachment and increased wages for women, as well as to reduced spending by businesses in the form of employee replacement costs, and by governments in the form of public assistance,” said study author Linda Houser, an affiliate fellow of the Center for Women and Work.

Women who take paid leave are 39 percent less likely to receive public assistance and 40 percent less likely to receive food stamps in the year following a child’s birth, compared to those who do not take any leave, according to the study. Not only is paid leave associated with fewer dollars in public assistance spending, it reduces the chance that a family receiving public assistance will increase its use of public funding following a child’s birth, Houser said.

Demographic changes in the U.S. workforce since the mid-1980s include a 13-percent increase (to 72.3 percent) in the percentage of children with both parents (in married-couple families) or their only parent working. "Despite public conversation and energy around the value of strong families and secure childhoods, the United States has fallen notably behind other industrialized countries in adopting public policies that support workers who need time off to address family needs,” the researchers wrote.

They also observe that except for a handful of states, public policy in the United States has been limited to unpaid leave. Since 1993, the Family and Medical Leave Act has required that eligible employees who work for employers with a minimum of 50 workers be provided up to 12 weeks of unpaid, job-protected leave annually "for their own health or the health of a family member.” The absence of federal-level policy pertaining to paid family leave often forces workers to "cobble together” such employer-provided leave as sick days, holidays, vacation time, disability insurance and/or paid or unpaid leave to deal with personal or family health problems. Many low-income workers have no vacation, sick or other leave.

Five states – California, Hawaii, New Jersey, New York and Rhode Island – have created disability programs that allow women to recover some lost wages during and immediately after pregnancy, the study noted. California and New Jersey, through very small worker payroll taxes, have passed laws to provide an additional six weeks of paid family leave for bonding with a newborn or newly adopted child. Additionally 10 states, including Washington, where implementation of a paid parental leave program awaits funding authorization, have recently considered paid family leave programs.

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