Paid Leave and Home Care Workforce

• In Event: The Child Penalty and Work-Family Policy: Paid Family Leave and Paid Sick Leave

Abstract

More than nine million US residents rely on long-term services and supports (LTSS) for help with everyday tasks. About half, and more than 70% of those who use paid help overall, are older adults. Paid care at home relies on the labor of home health aides and personal care aides. However, nearly 40% of this workforce lives in or near poverty. Almost half rely on public assistance, with median annual earnings less than $26,000. Home care jobs are often part-time/hourly with limited benefits. In 2024, only 35% who took time off in the past five years for family care or medical reasons were able to take paid leave. In light of low wages and limited benefits, this workforce experiences high turnover rates. Prior research has noted that schedule volatility is an important driver of turnover in the home care workforce. The shortage of home care workers is significant as the older adult population continues to expand. 

Paid leave allows workers time off to care for themselves or a loved one without losing their income source. It can potentially improve retention of home care workforce because workers no longer have to make difficult choices, particularly given widespread scheduling volatility. It also increases the value of their total compensation. There is currently no federal provision for paid leave in the US. The Family and Medical Leave Act (FMLA) provides a non-universal unpaid leave benefit—only 60% of US workers have access to FMLA, including less than 50% of low-income workers.

Some states have enacted Paid Family Leave (PFL) and Paid Sick Leave (PSL) laws; these laws do not exclude part-time workers. In this paper, we examine whether the implementation of paid leave policies (both PFL and PSL) influences work hours, wage and salary income, and the likelihood of labor market exit among home care workers. We use pooled cross-sectional data from the American Community Survey over 2018–2024. The sample includes home health and personal care aides who reported working in the last 12 months. We separately examine the effect of PFL and PSL on labor market outcomes using a generalized difference-in-differences design, employing Callaway and Sant’Anna as a robustness check. Findings indicate that paid leave (particularly PFL) is associated with a reduction in work hours. Overall, there is no consistent pattern for the effect of paid leave policies on earnings and labor market exits. Home health and personal care aides experienced heterogeneous effects. Specifically personal care aides experienced a reduction in work hours due to both PSL and PFL implementation. There is also some evidence of reduction in wages/salaries and an increase in labor market exits in this subgroup. A possible reason could relate to an increase in informal care by family members, which might crowd out formal care. There was no detectable effect of either policy on any outcome for home health aides. This paper provides new evidence on how paid leave policies affect formal care workers facing significant shortages and high turnover.

Authors

• Kanika Arora, University of Iowa
  Presenting Author

• Huang Huang, Augusta University
  Non-Presenting Co-Author