In March, Pew Research released the results of a national survey on paid-leave policies. Overwhelmingly, the American public says that working parents should have access to paid leave following the birth or adoption of a child. But almost three in four believe employers should foot the bill — and they don’t necessarily mean through new taxes or government requirements.
The same survey, however, found that the American public wants the president to make the economy a priority, as well as the poor and needy. Research shows that paid parental leave can be a tool to address both, but leaving it entirely to the private sector likely won’t achieve the type of effects that are needed. And government mandates on employers to fully absorb the costs would likely hurt the economy in other ways.
A better approach is to offer a modest, well-targeted government paid parental leave program to supplement what is already provided in the private market. In a new paper, my co-author and I propose one way to do this.
The program would be administered by the government as a way to support employment and the well-being of children who do not have access to paid parental leave in the private market. Many private employers already offer paid leave in some form, but the data suggest it may not be to those who need it the most.
We propose an income-tested paid parental leave program that would provide a reasonable benefit ($300-$500 per week, depending on family size and income) to low- and lower-middle-income households. We suggest phasing it in and out in a way that targets those who are the least likely to already have it, as well as the least likely to handle an income loss from time away from work.
Our estimates suggest that 57.1 million workers, 40 percent of all workers age 15 to 49, would gain access to paid parental leave through this program, with all having household incomes below 3.25 times the federal poverty level — which is a family income of approximately $80,000 per year for a family of four. Assuming almost 2 million Americans would adopt or give birth to a new child each year, it would cost $4.3 billion annually.
Many policymakers are reluctant to support any new government programs. But strong arguments can be made from both an economic and needs-based perspective. Research shows that paid parental leave has positive effects on employment and job continuity, both of which support economic growth. And research also shows that paid parental leave can result in health benefits for children and mothers. But if low-income families are the least likely to receive it, they are also the least likely to experience these positive effects. And returning to work too soon has been shown to negatively affect children, especially those from disadvantaged backgrounds.
The American public recognizes the importance of paid parental leave, even if they disagree on who should pay for it. Through an income-targeted paid parental leave program, policymakers can fill a critical gap in the private market by helping the most vulnerable who are often without this important safety net.
Angela Rachidi (@AngelaRachidi) is a research fellow in poverty studies at the American Enterprise Institute.
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