Paid leave: University of Michigan study shows impact on working moms

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Posted at 11:10 AM, Oct 28, 2019
and last updated 2019-10-28 20:28:14-04

(WXYZ) — Helping eliminate the "mommy gap" is what many policy makers and scholars believe would happen if families were offered paid leave.

The University of Michigan did a research study which found out that paid leave could have a reverse effect.

Studying the short and long-term effects of California's 2004 Paid Family Leave Act, or PFLA, in IRS tax data, the study shows that first-time moms who used the policy saw their employment fall by 7% and annual wages fall by 8% over the next decade.

They found no effect on the likelihood that mothers remain with their "prebirth employer."

Cumulatively, new moms taking up paid leave had fewer children and had earned about $25,681 less by 2014, reflecting a gain in wage replacement dollars but also income losses over 10 years. One in 10 new mothers also had one less child after 10 years, according to a news release.

"California increased the availability of paid leave by about six weeks, which is still very stingy compared to European policies. We were surprised that this modest policy seems to be nudging mothers out of the labor force," said Martha Bailey, professor of economics and research professor at the Institute for Social Research's Population Studies Center at U-M.

Results from the research study showed that mothers taking paid leave were more likely to read to their children as well as go on outings. According to a news release, the research team thinks the effect is concentrated in first-time mothers because this is when families learn how to balance work and family life, perhaps with one partner specializing in work at home and the other going back to work.

Because California implemented the paid leave act in July 2004, the study compares women who gave birth in early 2004 (who could technically take paid leave but often didn't) to women who gave birth after July 2004 (who could and took paid leave.) This gave the researchers a good comparison group in the same year: women who gave birth before July 2004 compared to women who gave birth after July 2004.

"One of the things this study tells us is that we have to be really careful in designing policy, Bailey said. "Increasing access to paid leave for everyone when mostly women take advantage of this could create greater specialization."