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One of the big questions in the paid leave debate is how to treat various types of leave. Three types of leave are typically discussed: parental leave (for new parents), family care leave (such as caring for an ill child or elderly relative), and medical leave (serious medical conditions requiring several weeks to months out of work).
The most recent proposals by Republicans address paid parental leave only. The Trump administration re-proposed its 6-week paid parental leave program in the 2019 White House budget, run through the state unemployment systems. Several Republican senators are considering a proposal to allow parents to claim Social Security benefits to pay for leave upon the birth or adoption of a child.
A point of criticism of these policies is that they leave big questions about medical and family leave unanswered (questions that we are working to answer in the AEI-Brookings Working Group on Paid Family and Medical Leave, as we also only addressed paid parental leave in our 2017 report). To be sure, a broader leave package would benefit more workers and is in line with the only national leave policy that the US has in place — the Family and Medical Leave Act, which provides 12 weeks of job-protected leave (unpaid) for parental, family care, and medical reasons.
But breaking off paid parental leave and treating it as a stand-alone policy might be a reasonable place to start. For one, parental leave has significant employment effects and strengthens women’s attachment to the labor force, which could help counter the historically low labor force participation rate in the US. Scholars have attributed one third of the relative decline of US women’s labor force participation relative to our global peers to the lack of family-friendly policies, and states that have introduced paid parental leave have seen increases in work and wages by new mothers in particular. As such, a paid parental leave policy could potentially contribute to long-run economic growth.
Parental leave is associated with improved maternal and children’s outcomes, including improved rates of breastfeeding. Early childhood investment has been found to have significant dividends across a person’s life and is arguably an area where the US has underinvested relative to investments that occur later in life.
Parental leave is relatively straightforward to administer. Birth is a relatively isolated event — well documented and occurring one to two times in a woman’s life on average. Medical and family care leave can be recurring and are subject to verification challenges, making them open to greater fraud and requiring a wider apparatus to verify.
Welcoming a new child is something that the majority of adults experience, one that requires significant time out of the labor force to recover from and occurs early in one’s life before, there is time for savings to accumulate. This makes it difficult for many people — including low-income families and single mothers — to have adequate resources saved for this event.
Underscoring the role for a safety net, only 18% of low-wage workers have access to paid leave of any type (i.e. vacation days, sick days, etc.) from their employer upon the birth of a child, according to a new report by the American Action Forum. This is well below the 33.9% of low-wage families for medical leave and half of low-wage families who receive paid leave for family care.
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Additionally, and perhaps most importantly from a political perspective, a broader leave package also would be considerably more expensive. Estimates of the paid parental leave proposals Republicans are considering hover around $5–7 billion a year, whereas estimates of a broader leave package hover around $100 billion or more. This would necessitate a considerable payroll tax increase — which would have its own economic implications — and certainly has little chance of passing in a Republican-controlled Congress. Given these factors, making parental leave contingent on medical leave increases the probability that workers get neither.
None of this is to say that public policy should not address other types of leave. But the types of policies that may work for parental leave might not be best suited for other types of leave. One alternative worth exploring is to address medical leave as part of a broader reform to Social Security Disability Insurance. SSDI provides income replacement for people who are unable work due to long-running medical conditions, making it a natural place to house shorter-term medical leave as well.
There is political inertia on both sides of the aisle for SSDI reform. SSDI will be insolvent in 2023 and is widely recognized for contributing to our low labor force participation rate. Reforms to SSDI — such as encouraging better work accommodation with employers and tighter screening — could be paired with the introduction of a short-term medical leave program, providing new coverage for people with short-term medical conditions (such as cancer) and encouraging people who can still work to access a more temporary program than SSDI. More research is needed before this option is pursued, but the end result could provide more comprehensive coverage for those with serious medical conditions than the 12 weeks of medical leave typically discussed.
Paid parental leave is relatively straight-forward, inexpensive, and a pro-growth policy with the political momentum to pass in relatively short order. The same cannot be said of the other forms of leave, at least as of yet. As a working group, we are hoping to develop a greater understanding of medical and family leave as the year progresses. But for now, addressing parental leave on its own might be a fine place to start.
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