The Cato Institute

The Unfortunate Truth About Government-Supported Paid Family Leave

Could government-mandated paid family leave make women more equal at home and in the workplace? The data suggests no…

Paid parental leave provides workers with financial compensation during temporary absences following the birth or adoption of a child. Private companies often provide paid leave and the federal government mandates 12 weeks of job-protected unpaid leave, but recently policymakers and advocates have become dissatisfied with the status quo.

Proponents of federal intervention argue that the private market does not or cannot provide sufficient paid leave. Moreover, proponents believe government supported leave would improve labor market outcomes and reduce gender and labor-market inequality.

However, the evidence that suggests otherwise…

First, ample data show that the private market provides paid leave at rates about 30 to 50 percentage points higher than proponents claim. Private paid leave provision has grown three- or fourfold over 50 years and continues to grow. This trend indicates industry is responsive to employee demands.

Second, workers may not be better off under federal paid leave and may be worse off. Government intervention provides new incentives, and individuals are likely to adapt accordingly. Evidence suggests government supported leave may result in wage or benefit reductions, female unemployment, or reduced professional opportunities for women.

Government intervention is also unlikely to correct gender or labor-market inequality in ways proponents desire. For example, families may respond to the policy by increasing women’s household work contributions relative to men’s. Redistributive effects of government intervention are likely to harm workers.

Policymakers should not adopt paid parental leave policies. Instead, they should consider improving workers’ lives through reforms that increase economic efficiency, remove barriers to flexible work, and increase choice.

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Mandating Paid Family Leave Sounds Good, But It Hurts Women

Government-mandated paid family leave—whether available to fathers or not—disproportionately harms young women…

The White House released its full budget last week, and one of President Donald Trump’s campaign promises materialized along with it: paid family leave. The details of the program remain hazy, but what we do know is that states would be required to design and finance six weeks of paid parental leave for working mothers and fathers.

This might sounds like a boon to working women — who (on average) do more child rearing and housework than working men do — but, unfortunately, a review of states and countries with government-mandated paid leave programs indicates they harm young women, whether they’re available to fathers or not. 

But it doesn’t have to be this way. Deregulatory initiatives — including reforming occupational licensing laws, which prevent women from working in certain occupations, and relaxing zoning regulations, which increase low-income women’s commute times — will make it easier for working mothers to participate in the labor force. Meanwhile, eliminating the tax exclusion for employer-sponsored health insurance — which ties women to jobs with abysmal maternity benefits — will enable women to take jobs that line up better with their personal needs. Deregulation of inane child care regulations — such as Washington, D.C.’s new requirement that child care workers obtain college degrees — will make work economically practical.

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