Women who took paid family leave in California earned less in the long run, study finds

When women take paid-time-off in California to care for their babies, it actually hurts their long-term career outcomes, according to a new study.

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The authors of a report released this month analyzed the effect that California’s 2004 Paid Family Leave Action — which provides residents with six weeks of partial pay when they take leave from work to care for a new child — had on women’s careers and determined that it did not increase women’s employment, wage earnings or attachment to employers.

In fact, the study found that taking paid leave tended to hurt women’s careers, ultimately reducing their annual wages six to 10 years after they gave birth by about 8 percent. Overall, the law actually tended to reduce the number of children born and, by decreasing mothers’ time at work, increase the time spent with children.

New mothers risked losing between $1,600 to $2,600 in the short-term if they took paid family leave, and up to $2,500 to $3,700 in the long run, the report found. If new mothers chose to take paid leave under the California law, they’d likely receive about $1,833 in wage replacement for one year, but approximately $26,681 in lower earnings over the next decade, for a net 10-year loss of $24,000.

Roughly 18 percent of all mothers and 26 percent of work-mothers took paid leave immediately after it was introduced.

“Although the Act was modest relative to typical paid leave policies in European countries, we find its implementation led to statistically significant and economically large declines in the employment and wage earnings of new mothers,” the report found.

One argument in favor of paid leave is that it instills loyalty among a company’s employees who choose to take advantage of it. However, the study dismissed that argument, noting that women who had access to paid leave were no more likely to remain with their pre-birth employer than women without paid leave access, both in the short and long term.

Of course, proponents of paid family leave argue that not only is it an important issue for both men and women, but that it can actually help boost the company’s bottom line.

Reddit co-founder Alexis Ohanian, who’s married to tennis star Serena Williams, has emerged as an advocate for paid parental leave, meeting with lawmakers on Tuesday to push for change.

“We’re kidding ourselves if we think our employees’ home life has no effect on their work life,” he said, adding, “I think we’re going to see a very crystal-clear business case for why this makes sense.”

Facebook COO Sheryl Sandberg has also become a proponent of paid leave, telling Fortune in an April 2018 interview that she supports the FAMILY Act, which would establish federally mandated paid leave.

"These are not trade-offs," Sandberg told the outlet. "This is not a trade-off between your business goals and your goals of taking care of your people. You take care of your people? You meet your business goals. And I think we need to make sure that people aren’t making trade-offs between taking care of their personal responsibilities and professional responsibilities."

In part, the effect on annual wages seems to be driven by reductions in the intensity of the woman’s work -- essentially, they tend to work fewer hours and weeks, but also often shift professions, taking up jobs with lower wages and potentially greater non-wage compensation, the report found.

California is one of five U.S. states that offers paid family leave. (Unlike most developed countries, the U.S. does not require companies to provide paid time off for new parents).

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