The Impact of Paid Family Leave Programs on Female Labor Market Outcomes

This paper investigates the impact of paid family leave (PFL) programs on working mothers' wages in the United States. Given the lack of PFL policies in the U.S. and the potential impact on working mothers, this research is both timely and important. Using data from the Current Population Survey (CPS) in 2000-2019, I estimate the effect of PFL programs in California, New Jersey and New York on women's wages using two-way fixed effects models. The findings show that PFL programs create an 18% wage gap between treatment and control states. This is potentially due to PFL programs providing working mothers with the flexibility needed within the first year of childbirth, thus reducing the likelihood of switching to lower-paid but more flexible jobs compared to the control states. The results provide valuable insights into the potential benefits of PFL policies for working mothers in the U.S. and suggest that these policies could help promote greater gender equity in the workplace.