Martha J. Bailey

RUI Collaborative Research: Measuring the Long-Term Effects of California's 2004 Paid Family Leave Statute with U.S. Tax Data

Research Project Description

Paid family leave has been championed as a policy to reduce labor market inequality and narrow the gender gap in wage earnings. California was the first state in the nation to enact a paid family leave statute effective in July 2014, but data have limited strong conclusions about the policy's impacts. This research uses novel, large-scale Internal Revenue Services (IRS) tax data to understand how California's paid leave policy affected parents' careers and family structure over its first decade in existence.

This research uses large-scale administrative IRS tax data to quantify the effect of California's 2004 Paid Family Leave Statute on the short and long-term labor-market and family outcomes. The sample consists of the universe of tax-filers allowing the investigators to follow individual mothers and fathers from 2001 to 2015, link to their children's exact date of birth using data from the Social Security Administration, and examine changes in labor market outcomes in the short-term (less than 1 year after her first birth), near term (1-5 years after birth), and long-term (6-10 years after birth). In addition, this research examines changes around first birth before the policy change took place as an internal validity check. For both mothers and fathers, the investigators provide novel evidence of how the 2004 Paid Family Leave Statute has impacted labor-force attachment, employer transitions, and wage growth. In addition, the investigators study how the Statute affected family structure, including both marital stability and childbearing.

National Science Foundation

Funding Period: 9/1/2018 to 8/31/2020

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