The Impact of Paid Leave Programs on Female Employment Outcomes

This paper provides evidence on the impact of paid leave legislation on female employment outcomes. Using a di erence-in-di erences and di erence-in-di erence-in-di erences strategy, I study the impact of two state-level programs in California and New Jersey. This paper is rst to exploit the fact that the cost of paid leave in these states is larger for rms with 50 or more employees (who are forced to o er job protection under the federal FMLA) than for rms with 49 or fewer employees. Comparing rms above and below this cuto , I estimate that paid leave with job protection reduces female hiring by around 1.15 percent in large rms compared to small rms where leaves are unprotected. Women of child-bearing age are most negatively impacted (hiring falls by around 2 percent), as are female employees in industries that are relatively less human capital intensive, like utilities and accommodation and food services.