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Paid Leave for Caregiving ISSUES and ANSWERS Paid Leave for Caregiving ISSUES AND ANSWERS AEI-Brookings Paid Leave Project NOVEMBER 2020 A Paid Leave for Caregiving ISSUES AND ANSWERS AEI-Brookings Paid Leave Project NOVEMBER 2020 AEI-Brookings Paid Leave Project Isabel V. Sawhill, coeditor Betsey Stevenson, coeditor Stephanie R. Aaronson Vicki A. Freedman Claudia Goldin Elisabeth Jacobs Claudia Olivetti Sari Pekkala Kerr Douglas A. Wolf Jennifer L. Wolff The American Enterprise Institute for Public Policy Research is a nonpartisan, nonprofit, 501(c)(3) educational organization and does not take institutional positions on any issues. The view expressed here are those of the authors. The Brookings Institution is a nonprofit organization devoted to independent research and policy solutions. The conclusions and recommendations are solely those of its authors, and do not reflect the views of the Institution, its management, or its other scholars. This report was made possible by support from Pivotal Ventures, an investment and incubation company created by Melinda Gates. The views expressed in this report are those of its authors and do not represent the views of Pivotal Ventures, its leadership, or employees. ii Contents A Note from the Codirectors of the AEI-Brookings Paid Leave Project ....................iv Aparna Mathur and Isabel V. Sawhill Paid Leave for Caregiving: An Introduction .....................................................1 Betsey Stevenson and Isabel V. Sawhill The Changing Landscape of Family Caregiving in the United States ..................... 11 Vicki A. Freedman and Jennifer L. Wolff Family Caregiving, Caregiving Leave, and Labor Market Outcomes for Caregivers ........................................................................................31 Elisabeth Jacobs Why Firms Offer Paid Parental Leave: An Exploratory Study ............................. 66 Claudia Goldin, Sari Pekkala Kerr, and Claudia Olivetti Effects of Paid Caregiving Leave on Government Costs .................................... 93 Douglas A. Wolf Some Thoughts on the Macroeconomic Implications of Providing Caregiving Leave ...................................................................................110 Stephanie R. Aaronson About the Authors ................................................................................. 130 iii A Note from the Codirectors of the AEI-Brookings Paid Leave Project aid family leave is getting increased attention in paid parental leave and recommended, as a com- Pthe United States. At the time of this volume’s promise among the diverse opinions in the group, publication, the United States (and world) is still reel- eight weeks of paid leave surrounding the birth or ing from the COVID-19 pandemic. The public health adoption of a baby, paid for by a modest increase in threat and economic fallout from COVID-19 have left employee payroll taxes and some spending cuts in many of us rethinking the relationship between health other programs. and economic security. But it did not take a pandemic Building on that report, we released a second in for the American public to understand the importance September 2018, Paid Family and Medical Leave: Chart- of paid time off from work for family or medical needs. ing a Path Forward. This report focused on medical Polls show the great majority of Americans favor pro- and caregiving leave. It also included new estimates of viding some paid time off to adults facing a medical the costs of paid leave and commissioned reports on emergency, parents needing to care for a new baby, where paid leave fits in a broader social insurance or or family members caring for a sick or elderly rela- budgetary context. We concluded that we lacked suffi- tive. Such policies are common in other countries and cient data or evidence to come up with a proposed con- adopted by nine states and the District of Columbia sensus solution to the issues of caregiving or medical in the US. Many US employers offer paid leave volun- leave. We therefore commissioned the research pre- tarily. Even so, many workers, especially the lowest sented in this volume and the companion volume on paid, do not have access to paid leave. During normal medical leave. times, this creates challenges when parents are both In all this work, we have been privileged to work breadwinners and caregivers. Amid a pandemic, it with a distinguished and diverse group of experts takes on increased urgency. and scholars as authors and advisers. You will find We established the AEI-Brookings Paid Leave Proj- all their names at the end of this note. We want to ect four years ago to study these challenges. In light express our deep appreciation for their work with- of various assumed goals and the relevant evidence, out in any way suggesting that they all agree with the what should elected leaders do? This volume on care- conclusions of our various reports on this issue. giving leave, edited by Isabel V. Sawhill and Betsey In spring 2020, one of us (Aparna Mathur) joined Stevenson, is simply the latest publication in this the staff of the Council of Economic Advisers to stream of crucial work on paid family leave. Its pur- advise members of President Donald Trump’s admin- pose is to provide new research and data to inform istration on the new economic challenges raised by policy on caregiving leave specifically. the pandemic, ending her work as codirector of this Two reports preceded this one. The first, Paid project. In her absence, AEI’s Angela Rachidi took Family and Medical Leave: An Issue Whose Time Has over to coedit the medical volume. We especially Come, was released in May 2017. It focused on want to thank Angela, along with all the other staff at iv APARNA MATHUR AND ISABEL V. SAWHILL AEI and Brookings, who worked so tirelessly on this Advisory Board project and whose names are also listed below. We hope all this work will provide a foundation for Douglas Holtz-Eakin thinking more clearly about whether a national policy Harry Holzer on paid leave is needed, what it might look like, what Elisabeth Jacobs it might cost, how businesses and households would Abby McCloskey be affected, and its role in providing more or better Christopher J. Ruhm care for both the young and the elderly. Jack Smalligan Betsey Stevenson Aparna Mathur, Jane Waldfogel Former Codirector, AEI-Brookings Paid Leave Project Previous Members of the AEI-Brookings Isabel V. Sawhill, Paid Leave Project Codirector, AEI-Brookings Paid Leave Project Heather Boushey Ben Gitis November 16, 2020 Sarah Jane Glynn Ron Haskins Jeffrey Hayes Authors and Editors of the 2020 Douglas Holtz-Eakin AEI-Brookings Volumes Harry J. Holzer Elisabeth Jacobs Stephanie R. Aaronson Aparna Mathur Yonatan Ben-Shalom Abby M. McCloskey Andrew G. Biggs Ruth Milkman Vicki A. Freedman Angela Rachidi Claudia Goldin Richard V. Reeves Elisabeth Jacobs Maya Rossin-Slater Christine Jolls Christopher J. Ruhm Claudia Olivetti Isabel V. Sawhill Sari Pekkala Kerr Betsey Stevenson Stefan Pichler Jane Waldfogel Angela Rachidi Christopher J. Ruhm Isabel V. Sawhill AEI-Brookings Staff Jack Smalligan Betsey Stevenson Erin Melly Douglas A. Wolf Sarah Nzau Jennifer L. Wolff Peyton Roth Nicolas R. Ziebarth Morgan Welch v Paid Leave for Caregiving AN INTRODUCTION Betsey Stevenson and Isabel V. Sawhill his volume examines the state of caregiving leave Taken together, these experiences have led to a Tin the United States before the 2020 corona- significant amount of research on the short- and long- virus pandemic. Most adults will be responsible for run benefits of parental leave, including the effects caregiving during their lifetime, yet little public infra- on parent-child bonding and parents’ labor mar- structure exists to support such work. Over a quar- ket experiences. The research allowed the group in ter century ago, the Family and Medical Leave Act 2017 to arrive at a compromise plan for paid paren- (FMLA) was signed into law, giving covered work- tal leave. The group agreed that eight weeks of paid ers access to 12 weeks of unpaid parental, medical, parental leave, available to either or both parents, and caregiving leave. Yet only 59 percent of American was a reasonable compromise between those who workers have access to FMLA leave due to coverage wanted more paid leave and those who favored less. limitations. Since the passage of the FMLA, changing Beyond parental leave, the group found it difficult family patterns, growth in female employment, and to grapple with the wider range of issues associated improvements in health and life expectancy have all with providing caregiving leave. In 2018, the group helped shape family caregiving in the 21st century. issued a follow-up report that summarized the evi- Over the past several years, the AEI-Brookings dence on caregiving and medical leave and dove into Paid Leave Project has analyzed and deliberated the the important details to consider in designing federal issues relevant to effective public policy for fam- policy. Through that effort, we realized there was ily caregiving and medical leave. The easiest task for much social concern about the burdens of family care- the working group was assessing paid maternity and giving but too few facts to fully understand these bur- paternity leave because of the wide-ranging experi- dens or design effective policy. ence outside the United States and the availability of Public policy needs to adapt to our changing lives data and research from some of the state-based pro- in which workers are also often caregivers. To put grams in the US. The United States
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