The Economics of Mandated Paid Leave Public
Schroeder, Mary Chen (2011)
Published
Abstract
In 2002, California became the first state to mandate a paid leave
policy, providing partial wage
replacement while for those who are employed but not at work. By
exploiting this quasi-natural
experiment, I am able to estimate the causal impact of the policy
on a number of economic
outcomes. First, the policy reduced the costs of family formation
for working mothers while
simultaneously increasing the cost of hiring fertile women.
Economic theory would predict that the
demand for and supply of labor would be affected by the policy. The
magnitudes of the labor
demand and supply curve shifts depend on the valuation and the cost
of the benefit. Any shift will
affect the wages and employment of the affected group. Empirical y,
I find that the wages and
employment of married women and those with children did decrease
after the policy was
implemented. My results using men as the comparison group suggest a
rather different story than
that seen above based on alternative female control groups. None of
the wage estimates is
significant, while the employment estimates when significant are
both positive and negative. Second,
providing paid leave could also affect health outcomes as a
mother's allocation of time towards
health production depends on the relative prices of the inputs.
Thus I also examine how paid leave
affected the self reported health status of mothers and their
children. I find no significant effects,
though the lack of statistical significance may be driven by my
small sample size. Third, though the
policy was enacted in September 2002, it was not until July 2004
that the first benefits were
disbursed. This "announcement period" al ows direct measure of the
causal impact of anticipating
paid leave on the timing of births. I estimate a 0.099 percentage
point decrease in the monthly
fertility rate in California for women ages 24-49 during the
announcement period, suggesting that
women did indeed postpone childbearing in order to receive more
generous leave.
Table of Contents
LIST OF FIGURES
LIST OF TABLES
Chapter
1. INTRODUCTION
………………………………………………………………………..
1
Policy Overview
2. THE EFFECTS OF PAID FAMILY LEAVE ON MATERNAL AND CHILD
HEALTH
OUTCOMES
……….……………………………………………………………………..
5
Introduction
Theory of Health Production
Literature Review
Identification Strategy
Data
Results
Discussion
3. THE EFFECTS OF PAID FAMILY LEAVE ON THE WAGES AND
EMPLOYMENT
OF WOMEN
…..……………………………………………………………..
……….. . 19
Introduction
Theory of Labor Supply and Demand
Literature Review
Identification Strategy
Data
Results
Discussion
4. THE EFFECTS OF PAID FAMILY LEAVE ON THE TIMING OF BIRTHS
……. . . 33
Introduction
Literature Review
Dynamic Utility Models and Policy Incentives
Births and Timing of Births: Biological Considerations
Data and Estimation Strategy
Results
Discussion
5. CONCLUSION ………………………………………………………………………...… 44
About this Dissertation
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