Mothers at Work: The Effect of California's Paid Family Leave Policy on Maternal Labor Market Outcomes

Abstract

This paper investigates the effects of California’s first-in-nation paid family leave policy on labor market outcomes for first-time mothers in the first five years after childbirth. I expand the existing literature by studying medium- to long-run labor market outcomes for mothers and by examining outcomes at multiple points after childbirth. Using data from the National Longitudinal Survey of Youth 1997 Cohort (NLSY97), I employ a difference-in-differences model to study the differences in both employment and wage outcomes for mothers in California versus all other states before and after the implementation of the paid leave policy in California. I find that having access to California’s paid family leave policy consistently and substantially improves both the likelihood that mothers are employed and maternal wages for first-time mothers up to five years post-childbirth. These results are robust to a wide variety of adjustments to both sample selection and empirical methodology. Positive effects of the policy are also observed for the number of hours per week and the number of weeks per year mothers work in the first five years after childbirth. These findings have important policy implications for the development of future state or national paid family or maternity leave policies in the United States.