Assessing the Employment Effects of California’s Paid Family Leave Program

Until recently, it was impossible to study how paid family leave mandates would impact employment in the USA. This changed in 2004 when California implemented the USA’s first paid family leave legislation. California’s program provides us with a quasi-natural experiment to study how the implementation of paid family leave affected employment in the state. This paper uses several difference-in-difference, fixed-effects regressions on a large panel of business establishments to study the impact California’s program had on establishment-level employment. Most model specifications show that the law is correlated with an increase in employment in firm establishments in the state.