The impact of paid family leave on household savings

Luke P. Rodgers

Labour Economics, 2020, vol. 67, issue C

Abstract: Research on paid family leave (PFL) has largely focused on various child outcomes and the labor force outcomes of mothers. Absent from previous work is an analysis of how such a policy alters incentives to plan for expected income shocks, a central question in other social insurance contexts. A conceptual framework demonstrates the potential for PFL to increase or decrease household saving depending on labor supply flexibility assumptions. Using the Survey of Income and Program Participation, I present evidence that the introduction of PFL in California reduced the savings of expectant parents relative to different comparison groups. Imprecise heterogeneity analysis suggests the crowd out is concentrated in higher-income families.

Keywords: Paid family leave; Household saving (search for similar items in EconPapers)
JEL-codes: D15 J13 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:67:y:2020:i:c:s0927537120301251

DOI: 10.1016/j.labeco.2020.101921

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