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Working Papers, No. 2024-12, May 2024 Crossref
The Impact of State Paid Leave Laws on Firms and Establishments: Evidence from the First Three States

We use the Longitudinal Business Database to examine the impact of state-level paid parental leave laws in California, New Jersey, and Rhode Island on firms. Our main estimation strategy uses multi-unit firms and compares within-firm changes in outcomes for establishments in treated and untreated states. We find that paid parental leave laws reduce employment in firms’ establishments in treated states. We investigate heterogeneity of the effects by pre-mandate share of workers in an industry that were women, and find that there is no systematic evidence that firms reduce employment more in industries with a higher share of women employees.

Working papers are not edited, and all opinions and errors are the responsibility of the author(s). The views expressed do not necessarily reflect the views of the Federal Reserve Bank of Chicago or the Federal Reserve System.

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