What you probably already know: The Family and Medical Leave Act provides up to 12 unpaid weeks for employees to help employees balance work and family responsibilities. While employees’ jobs are protected during unpaid leave, many parents return to work earlier than they’d like because they can’t afford the time off. The U.S. remains the only country among the Organization for Economic Co-operation and Development countries without federal provisions for paid parental leave. However, 13 states and Washington, D.C. have laws requiring paid family leave. A new study by economist Emily Oster & Healthy Moms, Healthy Babies, found that employers were surprised to find that paid leave was more affordable than they’d thought.
Why? Although unpaid parental leave provides job protection, studies have shown that it does not protect against the cost women face with challenges such as career progression, pay disparities and unequal treatment compared to their male counterparts. Meanwhile, 53% of new parents returned to work entirely because of the financial necessity, not because they felt ready. The Healthy Moms, Healthy Babies study suggests that paid leave can resolve some of those issues. Additionally, that study focused on Heartland states including Arkansas, Illinois, Mississippi and Nebraska, where there is no state mandate. Employers that implemented paid leave were twice as likely to say the benefits outweighed the costs, compared to the perception by employers that did not offer paid leave.
What it means: When women feel supported, they thrive in the workplace — and they also tend to remain working. Mothers in the study reported that paid leave was what allowed them to remain in the workforce. “Robust paid parental leave is good for kids and families, but there has been a hesitancy from private employers to offer it due to real economic fears,” said Oster, the study’s author. “By surveying both employers and parents in Heartland states, we uncovered a clear takeaway: the fear of paid parental leave for businesses is often far greater than the reality.”
What happens now? Other high-income countries like Australia, New Zealand, and Switzerland have federal laws that provide women with paid parental leave, some lasting up to 26 weeks. Bulgaria offers paid leave at 90% an employee’s salary for up to 58 weeks. While the U.S. still seems far away from a federal law, the Healthy Moms study suggests that cultural change can also happen without laws. Nebraska, for instance, does not have a paid leave mandate but 29% of employers offer it anyway, more than double the rate in Arkansas and Mississippi.
