Seven Outcomes of Implementing a Universal Paid Leave Policy in the United States

Universal, comprehensive paid family and medical leave in the United States is closer to becoming a reality than ever before — if Congress can find the political will to make it so. And if the pandemic has taught us anything, it’s that Americans desperately need it. At the beginning of 2020, just 20 percent of workers in the private sector had job-provided paid family leave to care for a new child or an ill loved one, and only two in five had job-provided personal medical leave to address their own serious health issue. Low-wage workers, workers in service industry jobs and part-time workers have less access to these benefits than salaried and full-time workers. Women and Black and Latinx workers are least likely to have access and most likely to suffer financial hardships when the need for family or medical leave from work arises.

Paid leave is politically popular across the aisle. More than 80 percent of voters across party lines support paid leave now, as well as before the pandemic. President Biden included a national paid leave program in his proposed American Families Plan, one piece of an economic recovery package that would make historic investments in physical and social infrastructure. The chairman of the powerful U.S. House Ways & Means committee, Rep. Richard Neal (D-Mass.), is committed to a robust paid leave plan, outlined in his Building an Economy for Families Act. Both the president’s plan and the Neal plan build on the Family and Medical Insurance Leave (FAMILY) Act, shepherded for many years by Sen. Kirsten Gillibrand (D-N.Y.) and Rep. Rosa DeLauro (D-Conn.) and policy designs in nine states and the District of Columbia.

As I testified to the Senate HELP Committee last month, if the United States adopted a well-constructed, inclusive, and supportive paid family and medical leave program, funded through public investments in benefits, administration, outreach, education, and enforcement, here are seven results we can expect to see:

1. Improved labor force attachment and increased earnings for women. Studies show that women — who are more likely than men to take paid leave — are also more likely to keep working in the shorter and longer-term if they have access to paid leave to care for a new child or a loved one. Earnings for new mothers will also rise. This creates greater economic security for women and their families, especially critical for the two-thirds of families with children where women are the sole or key breadwinners.
2. Better health for children. Parents’ access to paid leave means more likely to be able to make well-baby visits and meet childhood immunization schedules on time. It means fewer childhood head traumas and fewer behavioral problems in elementary school. For children who are hospitalized, a parents’ ability to take paid leave fewer days in the hospital and faster recovery times.
3. More engaged men in the lives of their children and families. Access to meaningful paid leave benefits helps equalize caregiving responsibilities by enabling men to take leave. Men want and expect to care for their children and older loved ones to the same extent as women do, but financial constraints, fears about work-related backlash, and societal perceptions often hold them back. A well-designed national paid family and medical leave law will help remove those barriers.
4. Better outcomes and reduced health care costs for ill, injured, or disabled loved ones. California’s paid family leave program has reduced nursing home utilization by 11 percent, in part because family caregivers are more available to provide care. For workers themselves, access to paid medical leave may hasten a return to work.
5. Savings to other tax-funded programs. Too often, critics of new spending focus on what paid family and medical leave will cost, rather than on the costs already borne by workers and society as a result of the status quo. Among the potential for direct savings to other programs, paid leave can reduce nursing home costs, which are often paid for by Medicaid. Research also shows a relationship between access to paid family and medical leave and reduced use of SNAP and other forms of public assistance.
6. Benefits for businesses, especially small businesses. In states with the longest-standing paid leave programs, California, New Jersey, Rhode Island, and New York, small employers are supportive of paid leave programs and overwhelmingly report positive or neutral effects on productivity, morale, loyalty, and the ease of dealing with employees’ leaves. Nationwide, approximately 70 percent of small businesses also consistently support national paid leave, and that was true before the pandemic, during the height of the pandemic, and now. Among larger companies with voluntary paid leave programs, introducing a paid leave program was associated with a 4.6 percent increase in revenue per full-time employee, 6.8 percent increase in profit per full-time employee, 3.2 percent increase in human capital ROI ratio, and 5.7 percent increase in return on human capital investment.
7. National economic growth, jobs growth, and increased economic activity. By making work more possible for women and caregivers, paid family and medical leave would help spur the country’s economic growth. McKinsey estimates that creating gender-equitable policies now would boost U.S. GDP by $2.4 trillion by 2030; and AARP estimates that better supporting working caregivers of older adults would boost GDP by $1.7 trillion by 2030. And new University of Massachusetts research estimates that paid leave benefits would increase household income nationally by $1.3 billion, of which $432 million would be income earned by workers throughout the economy as people receiving paid leave spend money on goods and services.

As Congress crafts and deliberates the scope of a nationwide paid leave program, they must meet U.S. workers’ and families’ unmet needs and honor our core values of family, love, responsibility and care. If they do, America will be a country with paid leave for all working people, no matter where they work, their job, or the care they need to provide or receive. This is about correcting America’s outlier status as the only high-wealth country without any paid leave policy. And it’s about much more.

Subscribe to The Thread monthly newsletter to get the latest in policy, equity, and culture in your inbox, and curated updates from New America you don't want to miss.