Association for Public Policy Analysis & Management

Since 1993, the Family and Medical Leave Act (FMLA) has provided up to 12 weeks of job-protected, but unpaid, leave to eligible workers experiencing a qualifying event. About 40 percent of workers are not eligible. Most U.S. workers must choose between losing their earnings or jobs to take time off to recover from health events and working through illness or periods of family care to maintain their incomes.

States have jumped in to fill the glaring need. Between 2004 and 2018, California, New Jersey, New York, and Rhode Island added paid family leave benefits to their existing programs for temporary disability. These social insurance programs cover most wage and salary workers in each state with partial wage replacement; eligibility and benefit levels differ from state to state. Washington, Massachusetts, and Washington, D.C., are following suit, and other states may join this group in the near future. Bipartisan interest in paid leave policies is increasing at the national level. The Senate may soon consider providing paid parental care leave via Social Security, allowing workers to choose to retire later in favor of getting benefits when welcoming a new child through birth or adoption. Finally, the Family and Medical Insurance Leave (FAMILY) Act proposes paid family and medical leave through new social insurance and has been reintroduced in Congress this session.

Using the only comprehensive simulation model, developed and refined by IWPR since the late 1990s, we estimate worker leave access, eligibility, and usage behaviors. The model simulates leave-taking behavior using data from the 2012 FMLA Employee Survey and estimates several aspects of leave-taking behavior, conditional on demographic characteristics and likelihood of leave type. The total costs of new (and existing benefits) are calculated and distributed among the population of workers. The paper will examine the distributional impact of program design across selected programs and proposals for workers by family income, individual earnings, race, ethnicity, and family structure, as well as by establishment size, hours of work, and region, identifying those who receiving new benefits and those likely to use existing benefits.

The paper will consider the extent to which paid family and medical leave insulates families, especially lower-income families, from the shock of disability, illness, and desired family growth, allowing them to continue to build savings and wealth and achieve middle class incomes. Further, in the context of changing employment arrangements, social insurance provides a flexible mechanism for workers in nontraditional arrangements—as entrepreneurs, part-time workers, and contract workers—as well as workers at small businesses to receive benefits as part of a larger pool with premiums that are typically payroll based.

The research will inform debates on program design, covered events, cost, and who would benefit for a diverse array of policymakers and other stakeholders interested in the future of work, family economic security, job quality, and expanding the social safety net to build a larger, stronger middle class.