Absence of conflict of interest.
The study’s objective was to examine the impact of California’s 2004 Paid Family Leave Act (PFLA) on take-up of paid leave, along with employment, wage earnings, and self-employment income for mothers within five years after childbirth and six to eleven years after childbirth.
The authors use a time series analysis to compare outcomes from 2001 through 2015 for California mothers who gave birth before and after the implementation of PFLA. The study uses Internal Revenue Service (IRS) tax return data linked with Social Security Administration (SSA) data on when each child was born.
The study suggested that the PFLA increased take-up of paid leave by about 18 percentage points but had no impact on mothers’ employment, wage earnings, or self-employment income when examining results for all California women who gave birth between 2003 and 2006.
The quality of causal evidence presented in this report is low because the authors did not demonstrate that the groups being compared were similar on all potentially important characteristics before the intervention. Specifically, demographic data on race and ethnicity were not available in the tax data. This means we are not confident that the estimated effects are attributable to the PFLA; other factors are likely to have contributed.
California's 2004 Paid Family Leave Act (PFLA)
Features of the Intervention
The first U.S. family leave legislation was the 1978 Pregnancy Discrimination Act, which created nearly universal paid leave through temporary disability insurance (TDI) in five states including California. This was followed by the 1993 Family and Medical Leave Act (FMLA), which provided 12 weeks of unpaid leave to eligible workers in some industries. In 2002, California passed the PFLA, which offered six weeks of partially paid leave to care for a newborn, newly adopted child, or seriously ill family member and which became effective on July 1, 2004. PFLA brought the total paid leave for a normal birth in California to 16 weeks: ten weeks through TDI and six weeks through PFLA.
PFLA offers paid family leave to both men and women at a rate of 55 percent of pre-birth earnings at a weekly cap, which was $603 per week in 2004. California workers in the private sector were almost universally eligible. Workers were first eligible on July 1, 2004, meaning that women who gave birth in the third quarter of 2004 could immediately take up the leave, whereas women who'd given birth earlier in the year could opt into leave starting in July but not immediately after their child’s birth.
Features of the Study
The study focuses on women who, in 2001, were at least 18 years old, lived in California, worked in California or a neighboring state or did not work, and who gave birth between 2003 and 2006. The authors use a time series analysis to compare outcomes from 2001 through 2015 for mothers who gave birth in the third quarter of 2004 to those of mothers who gave birth in other quarters or years. The statistical models control for quarter and year of child’s birth and pre-birth characteristics of the mother like age, marital status, employment, and earnings; they also include individual fixed effects for mothers.
The total sample is 597,384 mothers, of whom 74,317 gave birth in the third quarter of 2004 and, thus, represent the intervention group; the remainder gave birth in other quarters or other years between 2003 and 2006. Mothers were 31 years old, on average, with an average age of 28 at first birth. About 68 percent were working the year before they gave birth and they earned an average of $27,000 in wages the year prior to giving birth.
The authors link SSA records with IRS tax return data from 2001 through 2015, converting all wages into 2016 dollars, to compare take-up of paid leave, employment, and earnings. Employment is defined as earning at least $1,000 in wages each year. Take-up of paid leave is captured by receiving unemployment compensation as reported on the appropriate IRS tax form.
Public benefit receipt
- The study suggested that the PFLA increased take-up of paid leave by about 18 percentage points.
- The study suggested that the PFLA had no impact on mothers’ employment within five years of a child’s birth or between six and 11 years after birth when examining outcomes for all California mothers who gave birth between 2003 and 2006.
Earnings and wages
- The study suggested that the PFLA had no impact on mothers’ wage earnings or self-employment income within five years of a child’s birth or between six and 11 years after birth when examining outcomes for all California mothers who gave birth between 2003 and 2006. For new mothers, the study suggested that the PFLA increased take-up of paid leave by about 21.5 percentage points but had a significant negative impact on employment rate and annual wages six to ten years after childbirth.
Considerations for Interpreting the Findings
The authors attempted to control for preexisting differences between the groups. The study’s statistical model controls for pre-intervention measures of the outcome and the authors show that, after adjusting for quarter, the groups are statistically similar on age, age at first birth, and several other characteristics. The sample is also restricted to women. However, while the authors use American Community Survey data to examine potential sample selection differences in race and ethnicity for California mothers, the authors do not have measures of race/ethnicity in the data used for their primary analysis. Thus, cannot account for this potentially important characteristic that could differ between the two groups and that could affect the outcomes. Therefore, the study does not meet CLEAR standards for baseline equivalence.
Causal Evidence Rating
The quality of causal evidence presented in this report is low because the authors did not demonstrate that the groups being compared were similar on all potentially important characteristics before the intervention. This means we are not confident that the estimated effects are attributable to PFLA; other factors are likely to have contributed.