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The Impact of State Paid Leave Laws on Firms and Establishments: Evidence from the First Three States

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Abstract

We use the Longitudinal Business Database to examine the impact of state-level paid parental leave laws in California, New Jersey, and Rhode Island on firms. Our main estimation strategy uses multi-unit firms and compares within-firm changes in outcomes for establishments in treated and untreated states. We find that paid parental leave laws reduce employment in firms’ establishments in treated states. We investigate heterogeneity of the effects by pre-mandate share of workers in an industry that were women, and find that there is no systematic evidence that firms reduce employment more in industries with a higher share of women employees.

Suggested Citation

  • Kristin F. Butcher & Deniz Çivril & Sari Pekkala Kerr, 2024. "The Impact of State Paid Leave Laws on Firms and Establishments: Evidence from the First Three States," Working Paper Series WP 2024-12, Federal Reserve Bank of Chicago.
    • Handle: RePEc:fip:fedhwp:98827
    DOI: 10.21033/wp-2024-12
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    Keywords

    Paid Leave; Employment; Productivity;
    All these keywords.

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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