Association for Public Policy Analysis & Management

I examine the effect of paid parental leave policies – provisions that allow parents to take job-protected leave on account of childbirth and other activities related to children’s well-being, such as taking care of a sick child or attending school events – on the subjective well-being (SWB) of working parents. Parents' ability to take leave while maintaining job continuity and without compromising economic security or career progression, has become increasingly important, with at least one parent working in 88% of the 34.4 million families with children and with over 70% of all mothers participating in the labor force in the United States (Bureau of Labor Statistics 2013, 2014 ; Fox, Ruhm, Han and Waldfogel, 2013).

A number of well-designed studies have investigated the effect of paid parental leave policies on related measures of well-being, such as maternal employment and income, maternal and child health, and fathers’ involvement, but have not found uniform effects across these different measures.  To my knowledge, there is no existing published work that has investigated the effect of parental leave policies on parents’ subjective well-being in the United States, while comparable international evidence is preliminary and inconclusive. The study is further motivated by the renewed emphases on using subjective measures to describe well-being and evaluate policies (Blau, 1998; Layard, 2006, 2010; Stiglitz, Sen and Fitoussi, 2010; Deaton and Stone, 2013),

I use data from the American Time Use Survey (ATUS) Well Being modules 2012- 2013 and  Leave Module 2011, combined with state level policy data. I employ a modified difference-in-difference design suitable for identifying effects when the data has individual and geographic variation but no longitudinal variation and when focal policies may be correlated across states (adapted from prior empirical work in Washbrook, Ruhm, Waldfogel and Han, 2011).  The identification strategy utilizes exogenous variation across states with respect to three kinds of leave policies –Temporary Disability Insurance  that can be utilized by new mothers to take paid time off (available in 5 states), Paid Family Leave Insurance that can be used for bonding and care of ill children (available in 2 states) and labor policies that allow parents to take time -off work to attend children’s school related events (available in 16 states),  along with individual variation in eligibility for each policy, to compare the difference in well-being between eligible and control groups, in policy states compared to non-policy states.

I find no effect of parental leave policies on subjective well-being for parents overall, but positive effects for unmarried mothers and parents of low socio economic status. These results confirm expectations set by prior research on leave-taking that finds paid parental leave policies to be particularly useful for the relatively disadvantaged (Rossin-Slater, Ruhm, and Waldfogel, 2013).