66  Monthly Labor Review • March 2012

Précis

How paid family leave affects 

mothers in the labor force

Women’s labor force participation 

has increased dramatically over 

the past four decades, particularly 

among women with children under 

age 18. According to data from the 

BLS Current Population Survey, 

the labor force participation rate for 

women with children under 18 was 

47.4 in 1975, reached a high in 2000, 

and then held fairly steady; in 2010, 

the rate was 71.3 percent. The labor 

force participation rate in 2010 for 

mothers with children under 3 years 

old was 61.1 percent, a figure which is 

almost double the rate in 1975, when 

only 34.3 percent of mothers with 

children younger than 3 worked.

Despite this substantial growth, 

laws governing paid leave for new 

mothers have not much evolved. 

The United States is the only advanced industrialized nation without a federal law providing new 

mothers (and fathers) with entitlements to paid family leave (PFL). 

And only three states—California, 

New Jersey, and Washington—have 

implemented PFL programs. 

California’s Paid Family Leave 

program, administered by the State 

Disability Insurance program, was 

established in 2004 to provide up 

to 6 weeks of benefits for California workers who need time off from 

work to care for a seriously ill child, 

spouse, parent, or registered domestic partner, or to bond with a new 

child. Workers who receive benefits 

get a portion of what they usually 

earn in a week.

In “The Effects of California’s Paid 

Family Leave Program on Mothers’ 

Leave-Taking and Subsequent Labor 

Market Outcomes”(National Bureau 

of Economic Research, Working Paper 17715, December 2011, https://

www.nber.org/papers/w17715), 

authors Maya Rossin-Slater, Christopher J. Ruhm, and Jane Waldfogel 

examine how California’s program 

affects leavetaking by mothers following childbirth, and particularly 

focus on how the program affects 

different demographic groups and 

reduces previous disparities in leavetaking. The authors also look at 

the medium-term impacts of maternity leave on mothers’ subsequent 

labor market outcomes.

The authors’ analysis uses March 

Current Population Survey data 

from 1999 through 2010 and a difference-in-differences approach to 

compare the leavetaking experiences 

of mothers with infants or young 

children before and after the PFL

program was implemented in California with the leavetaking experiences of control groups alternately 

consisting of women with older 

children, childless women, men 

with noninfant children, or new 

mothers living in other states. The 

difference-in-differences approach 

helps measure the impact of the 

program apart from any leavetaking 

trends already in effect.

The authors determine that the 

California PFL program increased 

leavetaking among all groups of new 

mothers, citing evidence that overall maternity leave use more than 

doubled. Prior to the availability 

of PFL, new mothers in California 

typically took about 3 weeks of maternity leave. Their study shows that, 

after the implementation of the PFL

program, overall use of maternity 

leave increased by an average of 3 to 

4 weeks, with new mothers taking 

an average of 6 to 7 weeks of leave. 

The authors also note that PFL in 

California increased not only the 

length of the leave taken, but the 

likelihood a new mother would 

take leave. The authors found that 

the likelihood of a woman taking 

maternity leave increased by 6.1 to 

7.4 percentage points (depending on 

the choice of control group) after the 

implementation of PFL. 

This growth in leavetaking was 

particularly notable for mothers who 

were unmarried or nonwhite or who 

had less education. These women 

had relatively low levels of maternityleave use to begin with because they 

were less likely to be eligible for leave 

under the previous policies and less 

able to afford unpaid time off work. 

Rossin-Slater, Ruhm, and Waldfogel find that leavetaking among new 

mothers with only a high school degree rose 5.3 percentage points, and 

among new mothers with some college, leavetaking rose 7.8 percentage 

points; in contrast, leavetaking for 

mothers with a college degree rose 

only 4.0 percentage points, a statistically insignificant amount. Unmarried mothers’ leavetaking grew 7.3 

percentage points compared with 6.0 

percentage points for their married 

counterparts. The authors point out 

that use of maternity leave increased 

sevenfold for black mothers; where 

black mothers once took around 1 

week of leave after childbirth, they 

now took 7 weeks of leave. 

The authors offer an initial examination into the medium-term labor 

market outcomes of new mothers 

who took advantage of California’s 

PFL program. They did not find any 

negative effects on the labor market 

outcomes of mothers who had applied for PFL benefits; instead, the 

authors found evidence that, 1 to 3 

years after the birth of a child, employed mothers had a 6- to 9-percent 

increase in work hours and a similar 

growth in wage income.

Although the authors’ research 

looked into the short and mediumterm labor market outcomes of paid 

family leave after a woman becomes 

a mother, they note that it will be 
Monthly Labor Review • March 2012  67

was not receiving a pension. So it 

appears that a program that was 

targeted at blacks (and thus at black 

women) had a positive effect on 

women’s health and development 

without causing any negative effects 

on the rest of South African society. 

(Although no corresponding positive 

effects were found when the pensioners were men, and no corresponding 

positive effects were found for boys, 

no negative effects were found either.)

On the other hand, in a study 

conducted in Ahmedabad, Gujarat, 

India, self-employed women were 

offered business training in an attempt to boost their incomes. The 

authors of the study found that upper caste women benefited from the 

program but lower caste women and 

Muslim women did not. The authors 

explained that upper caste women 

might have had more to learn than 

lower caste women because upper 

caste women are less likely to have 

had business experience. Because the 

upper caste women were starting out 

from a lower income level than the 

lower caste women, the change in the 

income of upper caste women would 

be proportionately greater. As for the 

Muslim women, their mobility was 

restricted by their religion, so they 

could not readily put to use whatever 

knowledge the program gave them. 

Thus, a program aimed at women 

benefited, not just a relatively small 

proportion of women, but actually 

the already wealthiest among them. 

The lesson to take away from the 

two examples given, as well as from 

many others that the author cites, 

is that policies aimed at improving 

gender equality are necessary, but 

may have to be evaluated carefully 

before they are implemented. Empowering women is a good thing, 

but the literature sometimes exaggerates the good it can do and ignores potential long-term negative 

effects both on some women and on 

the overall economy.

worthwhile to examine longer-term 

effects on the health and development of the children as data become 

available. 

The chicken or the egg: 

women’s empowerment 

and economic development

What is the relationship between 

the empowerment of women and 

economic development? If more 

women are empowered—through 

shifts in political power, monetary 

subsidies, more economic freedom, 

and the like—will that translate 

into greater economic development 

for the benefit of all? Or, conversely, 

does economic development automatically lead, or at least tend to 

lead, to more empowerment and less 

inequality for women? In “Women’s 

Empowerment and Economic Development,” (National Bureau of 

Economic Research, Working Paper 17702, December 2011, http://

www.nber.org/papers/w17702.

pdf), Esther Duflo, Massachusetts 

Institute of Technology professor of 

poverty alleviation and development 

economics, reviews the literature on 

both sides of the issue and concludes 

that the link between women’s empowerment and economic development is relatively weak in either 

direction, so the cause of equality 

between men and women requires 

policies targeted directly at women.

On the one side are policymakers 

and social scientists who contend 

that women’s equality is enhanced 

when poverty decreases; such policymakers aim to create the conditions for economic growth without 

necessarily proposing policies targeted specifically at women. In contrast to these advocates are those, 

such as the World Bank, which favor addressing women’s inequality 

directly, by overhauling institutional 

structures, offering more scholarships to girls, and setting quotas for 

women in legislative bodies.

Duflo examines a number of studies of conditions in the less developed world (where women’s inequality is greatest) which show that when 

poverty is reduced, not only does 

everyone benefit, but women benefit disproportionately. The problem, 

however, is that reducing poverty is 

a difficult task; that is why poverty 

remains widespread. So, although 

spurring economic development is 

effective when it happens, it doesn’t 

happen that often. Therefore, says 

Duflo, policy action is still necessary 

to empower women.

But policies that directly address 

gender imbalance have their own 

problems. Policies targeted at improving the situation of women 

could easily be justified if they both 

promote equality and stimulate further economic development—and 

they do in some instances. But not 

always do decisions made in favor of 

women turn out best for long-term 

development. Therefore, although 

the literature often depicts the empowerment of women as being good 

for general economic development, 

this picture is somewhat exaggerated, and policies aimed at women 

must be evaluated on a case-by-case 

basis, especially with regard to their 

general and long-term effects.

Duflo cites a number of studies that 

support evaluating each policy on its 

own merits. On the one hand, in a 

study that she herself previously conducted in South Africa, Duflo found 

that, among blacks, girls who lived 

with a grandmother who was receiving a pension from the government 

were heavier—that is, better fed—on 

average than girls who lived with a 

grandmother who was too young to 

get the pension. Also, among girls 

who were born after the establishment of the pension system, those 

who were living with their pensioner 

grandmothers were taller than those 

who lived with a grandmother who