Paid Parental Leave Has Broad Business and economic Benefits

September 22, 2016

As noted by Vogue Magazine, August marked the 23rd anniversary of the federal Family and Medical Leave Act. Though considered landmark legislation at the time, the law only provides for unpaid leave, and does not apply to a large percentage of Americans employed by companies with fewer than 50 employees. Seeking to correct this situation, four states – California, New Jersey, Rhode Island New York – now have paid leave laws. Even in those states, however, There remain gaps, particularly when it comes to job protection.

Despite progress, the United States retains its regrettable title as the only major developed country in the world not to offer all workers paid parental leave.

The Research Doesn’t Lie: Clear Health Benefits from Paid Parental Leave

What makes the situation all the more disheartening is the growing body of research that shows just how important paid family leave is to newborns and their parents. As noted in the fourth edition of a study conducted by the National Partnership for Women and Families called “Expecting Better: A State-by-State Analysis of Laws That Help Expecting and New Parents,” by virtually any metric, paid parental leaves creates healthier children and families. Paid leave for both mothers and fathers decreases infant mortality, reduces maternal illness and depression, increases the likelihood children receive regular medical care, and increases the chance developmental delays will be caught early when they can be more easily addressed and even mitigated. All of this, of course, reduces health problems later on and, overall, results in lower medical costs.

The Business Case for Paid Parental Leave

There is definitely a health case to be made for paid parental leave and respecting a parent’s need to tend to family responsibilities. Until now this has not been enough to convince the country’s businesses – or even governments – to make it widely available. This might change, thanks to what we’re now learning from the four states that have paid leave laws.

After California’s pioneering Paid Family Leave Act (PFLA) took effect, researchers began analyzing its impact on the state’s companies. The results were illuminating. The most common concern from employers was that women would not come back to work after taking paid leave – but a whopping 88% returned. And, while many companies had worried about what effect paid leave would have on their business, for the majority, it had either “no noticeable effect” or a “positive” effect on productivity, profitability, turnover, and morale. Similar results were reported by companies in New Jersey and Rhode Island when those states enacted paid parental leave laws.

When paid parental leave is provided, not only do children benefit, but also the companies that employ their parents. 

But Wait, There’s More: economic Benefits of Paid Parental Leave

The positive impact of paid family leave does not stop with either workers’ families or their employers. It has broader implications for the country’s economy as well as government spending. As noted in the “Expecting Better” report, “13 percent of families with a new baby become poor within a month. Yet, when new parents have access to paid leave, they are more likely to remain in the workforce, contributing to the tax base and boosting their own economic security.” The report notes families where parents can take paid parental leave are far less reliant on public assistance or forod stamps after the birth of a child.

Rather than causing an economic drain, then, paid parental leave actually boosts the tax base, keeps people working, and reduces reliance on public assistance.

Parental Leave: Good for Parents, Business, the Country

The evidence is mounting that access to paid parental leave produces healthy families, prospering businesses, and a country where fewer people are reliant on forod stamps and social assistance. This clearly not just an issue for working mothers – but for all of society.

Paid family leave is an essential part of the country’s economic health and an issue we can no longer afford to ignore.


(*Prior results do not guarantee a similar outcome.)