Welfare State Paper 1 Paid Family Leave copy

S R Larson Paid Family Leave Wyoming Prosperity
The Paid Family Leave Experience
While forms of tax-funded, paid leave programs date back to at least the Bismarck era of the 19 th
century, the modern programs that are the focus of the current U.S. public debate came about
with the modern welfare state in the mid-20 th century. A good example is the Swedish paid-leave
program, with coverage for parental leave, sickness, and disability insurance, the first parts of
which were established in 1955.
Most of the research on paid family leave evaluative in nature, asking whether or not the
programs have a positive impact on the lives of children and their parents. Those questions fall
into two broad categories: health and economy. In the health category, focus is on the relation
between paid family leave and child health, while the economic category looks at how paid leave
affects employment and earnings among mothers.
Despite many attempts to establish significant results in both categories, the literature is overall
inconclusive and in some instances reports more or less trivial results.
A Canadian study of women’s workforce participation under paid leave reached conclusions of
both kinds. 2 The trivial conclusion said that when the federal Canadian program doubled the time
of paid leave, from 25 weeks to 50, women were less inclined to return to work within the new,
extended period of paid leave. It is not a significant contribution to find that when people get paid
leave from work, as opposed to unpaid leave, they will be more inclined to stay away from work
during their period of eligibility.
The same study also reported that it found no change in women’s attachment to the labor market
after 50 weeks of leave, compared to 25 weeks. In other words, the study was inconclusive on this
issue.
The workforce attachment argument is also made in a Swedish study, published in 2003 as a
doctoral thesis at the University of Stockholm. In an examination of data from 18 welfare states
over 25 years, the study found that paid family leave: 3
• benefits female workforce participation in families with two income earners, but
• is negative for female workforce participation in “traditional” families, i.e., families with
one income earner.
In other words, in families where women work before paid family leave, women continue to
work; in families where women do not work, they continue not to work even as work would give
them access to paid leave.
As with the aforementioned Canadian study, legal aspects again trivialize the finding: to qualify
for paid leave from work, a parent must first be employed.
Leaving the economic questions regarding paid leave, a somewhat more interesting finding is
that paid family leave may have positive effects on children’s well-being. One study finds that
2 Hanratty, Maria, and Eileen Trzcinski. “Who Benefits from Paid Family Leave? Impact of Expansions
in Canadian Paid Family Leave on Maternal Employment and Transfer Income.” Journal of Population
Economics, vol. 22, no. 3, 2009, pp. 693–711.
3 Ferrarini, T: Parental Leave Institutions in Eighteen Post-War Welfare States; Doctoral Thesis, The
Swedish Institute for Social Research at Stockholm University; Stockholm, Sweden 2003.
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