Impact of State-Level Changes in Paid Family Leave Policies: Evidence from Washington, DC, and Massachusetts

• In Event: Effects of policies to promote economic and social well-being

Abstract

We examine the impact of paid family leave policies (PFL) on establishment creation, closures, and job outcomes. Our analysis exploits the timing of when Washington, Washington DC, and Massachusetts implemented their state-level programs in 2020 and 2021, relative to a set of control states. We employ a synthetic difference-in-differences (SDID) research design using county level data from the American Communities Survey (ACS), the Economic Census, the Bureau of Economic Analysis (BEA), and the Federal Housing Finance Agency (FHFA) from 2014 to 2024 to assess establishment creation and deaths along with job creation and losses. Based on the prevailing perception that paid leave programs are expensive, we expect to find that fewer establishments and jobs would be created in our target geography, versus our group of non-paid leave states. Alternatively, we would expect more establishment closures and job losses. Our results contribute to ongoing policy discussions and the existing body of research on PFL and the impact of employee benefit-related costs on entrepreneurship.

Author

• Tracey Freiberg, St. John's University
  Presenting Author