Paid Family Leave is Actually Good for Businesses

When workers have paid family leave, especially after childbirth, they’re more likely to stay in the workforce and significantly less likely to require public assistance, according to a new report from the National Partnership for Women & Families (NPWF). In fact, they’re even more likely to receive salary increases.

That’s good for everybody, the authors say, including both taxpayers and businesses, which reap a more stable workforce when paid family leave is offered.

Today, nearly three-fourths of children live in homes where the adults who care for them work outside the home. Workers in jobs that have paid holidays and vacation time often cobble together those benefits in order to take care of a newborn or other family members. But low-wage workers whose employers don’t offer any paid leave, say the study’s authors, are at risk for falling out of the workforce and onto public assistance rolls when family members require their care.

The study, Pay Matters: The Positive Economic Impacts of Paid Family Leave for Families, Businesses and the Public, conducted by the Center for Women and Work (CWW) at Rutgers University, reports that:

[W]omen who take paid leave are 39 percent less likely to receive public assistance and 40 percent less likely to receive food stamps in the year following a child’s birth, when compared to those who do not take any leave.

Study co-author Linda Houser, an affiliate fellow at CWW, explained in a statement:

While we have known for a long time about the maternal and infant health benefits of leave policies, we can now link paid family leave to greater labor force attachment and increased wages for women, as well as to reduced spending by businesses in the form of employee replacement costs, and by governments in the form of public assistance.

The CWW findings led the NPWF, which commissioned the report with funding from the Rockefeller Foundation, to call for the setting of a national standard for paid family leave. NPWF President Debra L. Ness explains:

At a time when governments are struggling with deficits and working families are struggling to stay afloat, this new study shows that allowing workers to take paid time off to recover from illness or care for their families saves precious government and taxpayer resources, while giving families the stability they urgently need. There couldn’t be a better time for employers and legislators to prioritize these policies.

The full report, authored by Houser, an assistant professor at Widener University, and Thomas Vartanian, a professor at Bryn Mawr College, can be downloaded here.