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The Long-Run Effects of California's Paid Family Leave Act on Women's Careers and Childbearing: New Evidence from a Regression Discontinuity Design and US Tax Data

Author

Listed:
  • Martha Bailey
  • Tanya Byker
  • Elena Patel
  • Shanthi Ramnath

Abstract

We use administrative tax data to analyze the cumulative, long-run effects of California's 2004 Paid Family Leave Act (CPFL) on women's employment, earnings, and childbearing. A regression-discontinuity design exploits the sharp increase in the weeks of paid leave available under the law. We find no evidence that CPFL increased employment, boosted earnings, or encouraged childbearing, suggesting that CPFL had little effect on the gender pay gap or child penalty. For first-time mothers, we find that CPFL reduced employment and earnings a decade after they gave birth.

Suggested Citation

  • Martha Bailey & Tanya Byker & Elena Patel & Shanthi Ramnath, 2025. "The Long-Run Effects of California's Paid Family Leave Act on Women's Careers and Childbearing: New Evidence from a Regression Discontinuity Design and US Tax Data," American Economic Journal: Economic Policy, American Economic Association, vol. 17(1), pages 401-431, February.
    • Handle: RePEc:aea:aejpol:v:17:y:2025:i:1:p:401-31
    DOI: 10.1257/pol.20200277
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    More about this item

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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