Paid Leave

Government-Mandated Paid Leave Programs Don't Work

There's no such thing as a free lunch.


As the saying goes, the definition of insanity is doing the same thing over and over again and expecting a different outcome. This is a perfect way to describe the current effort by Democrats and some conservatives to implement a federal paid leave program. If the United States implements this policy, they believe Americans will not suffer the same negative consequences suffered in every country that has such a policy on its books.

Last year, the conservative American Enterprise Institute (AEI) released a joint report with the more progressive Brookings Institution titled "Paid Family and Medical Leave: An Issue Whose Time Has Come." While the authors disagree among themselves about the specifics of a federal program, they "unanimously agreed that some form of paid parental leave should be offered to help workers at the time of birth, adoption, or fostering of a child."

These authors gathered for an AEI panel discussion on the issue this week to renew their commitment to a compromise solution that falls somewhere between big and bigger government policies. According to the original joint report, the plan "would provide eight weeks of gender-neutral paid parental leave, replace 70 percent of wages, and offer job protection. The policy would be fully funded by a combination of payroll taxes and savings elsewhere in the budget, with no increase in the deficit but also no adverse effects on low-income families," according to the AEI website. Translation: more spending, more taxes, and supposedly paid for by savings that will never materialize.

While said to be necessary to bring the United States into alignment with other industrialized countries—all of which have government-mandated paid leave—in reality, such a policy here would simply mimic a policy that has already backfired elsewhere, including four U.S. states and the District of Columbia.

A 2018 paper by Cato Institute analyst Vanessa Brown Calder reviews the literature on the impact of paid leave. She found that a government-provided solution to the issue won't result in the proverbial free lunch for which supporters hope. Trade-offs for paid leave policies vary depending on policy specifics, but they include discrimination against workers of childbearing age and, as such, may favor older workers, resulting in fewer leadership roles, higher unemployment, and lesser pay for women.

Paid leave advocates often argue that paid family leave and other social policies will reduce gender inequality in the workplace. Recent research on Denmark, however, suggests that this is hardly the case.

Denmark is often cited as an example of working-parent paradise. The government offers 52 weeks of paid leave and other generous family-friendly benefits. But even in paradise, there's no such thing as a free lunch. A January 2018 National Bureau of Economic Research paper by economists Henrik Kleven, Camille Landais, and Jakob Egholt Sogaard looks at what happened to the earnings of 470,000 Danish women who gave birth for the first time between 1985 and 2003. These researchers found that having children was a career bummer for women.

For instance, they found that while men's and women's pay grew at roughly the same rates before they had kids, mothers saw their earnings rapidly reduced by nearly 30 percent on average, compared to the trajectory they were on before having kids. Men, on the other hand, saw their pay grow at the same rate before and after their children were born. Women may also become less likely to work, and if still employed, had earned lower wages and worked fewer hours.

The absence of nationally-mandated paid leave in the United States doesn't mean that American women don't get paid leave, however. As Brown Calder writes, "Over the past 50 years, the private sector has substantially increased paid leave offerings; this suggests the private market responds to employee demands. At the same time, mothers' labor-force engagement increased without government intervention." Indeed, over the past several years, without the government mandating or paying for paid parental leave in the United States, somewhere between 45 percent to 63 percent of workers reported they already had access to paid leave, according to Brown Calder's analysis. That percentage is likely higher today.

While AEI and Brookings scholars continue to dream about a distortion-free paid leave policy, scholars more grounded in reality must resist the temptation to repeat the mistakes of the past—and of other countries—and still expect different results.


NEXT: Joe Biden Says He Didn't Do Anything Wrong, Will Do Better From Now On

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  1. While fascinating to me, and confirming my and many others’ belief that government is incompetent and government coercion always backfires, facts have nothing to do with the matter. The proponents of mandated family leave are interested in mandated, not family leave. They don’t care what the policy is as long as they can expand government and take the credit.

    1. Those votes aren’t going to buy themselves.

    2. That could well be the case w the technocratic Brookings part of the team, but not w the AEI people. To them it’s about promoting family values, damn the cost.

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  2. “In a statement, the president of the correction officers union Christopher Mabe said, “An investigation was completed, and there was no wrongdoing found. Our correction officers followed proper procedure and protocol.””

    Sounds like that’s that then.…

  3. Somewhat related: Finland’s Basic Income Experiment Shows Recipients Are Happier and More Secure

    Basic income recipients were no more and no less likely to be employed than members of the control groupBasic income recipients were happier with their lives and experienced less stressThey had more trust in other people and social institutions, and showed more faith in their ability to have influence over their own lives, in their personal finances and in their prospects of finding employment

    No apparent report on the thoughts and feelings of the people providing the income.

    1. Give me a few million to research the feelings of the taxpayers. It would make me feel better.

    2. “No apparent report on the thoughts and feelings of the people providing the income.”

      SF’s mayor wants to turn a very large parking lot on the Embarcadero into a water-front free-housing project for the bums; she’s surprised to get push-back.
      And, as an SF proggy ignoramus, she both gripes about the number of bums we have and then pushes some cockamamie scheme like this to attract more.

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    1. Now, see, that‘s the kind of family leave program we can all get behind!

  5. Paid family leave may or may not be a good idea, depending on the circumstances.
    *Mandatory* paid family leave is definitely a bad idea. Precisely because everyone’s circumstances are a little bit different and can’t be adequately shoehorned into a one-size-fits-all framework.

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      1. Damn squirrels!

    2. everyone’s circumstances are a little bit different and can’t be adequately shoehorned into a one-size-fits-all framework.

      Yet, jeff. *Yet*.

    3. One size will fit all once we force everybody into the same mold through mandated everything.
      Get with the program!

  6. If you’ve ever tried to get medical leave (FMLA), you would have realized how to the corporations have used the system to cover their butts and put in the advantage in their favor. I’m sure the same would happen with this.

    1. Big corporations are better able to absorb the cost of paid leave and job security than small businesses, so it automatically tilts the tables in their favor

  7. you had me at ‘government mandated’. Case closed.

  8. I hate having to keep bump-stock pressing Esc w my L hand to keep control of the browser w my R hand. Maybe I’ll go back to downloading & stripping the header & script statements.

  9. What ever happened to the plan to let parents take their SS retirement benefits in advance as family leave benefits? Not mandate-y enough?

  10. It’s funny but my copy of the Constitution doesn’t say anything about family leave.

  11. It’s almost like raising the cost of labor reduces the supply of labor or something. Really activates my almonds.

  12. If Joe Biden implements paid leave, it will work especially if he gets input from Kamala Harris and AOC.
    It could be a family leave program that also reduces gas (CO2).

    1. I’m sure Uncle Badtouch would love to get together with K Harris and AOC. For a ‘behind closed doors’ meeting.

  13. Why does anyone even read this garbage anymore? Europe clearly does this and it’s fine. Only here can we say we’re the greatest country on earth yet argue that somehow these things can’t be done when they already are elsewhere.

    Yet again Reason focuses on all the economic arguments yet none of the actual material ones. Just like saying ‘hey, the EPA has decreased our GDP by 70%’ yet ignoring the fact that while doing so they let everyone live ten more years.

    1. ^Sarc or new contestant in ‘fucking lefty ignoramus’ event.

  14. Big corporations are better able to absorb the cost of paid leave and job security than small businesses, so it automatically tilts the tables in their favor

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