Unanticipated Effects Of California\u27S Paid Family Leave Program

We examine the effect of California paid family leave (CPFL) on young women\u27s labor force participation and unemployment, relative to men and older women. CPFL enables workers to take at most 6 weeks of paid leave over a 12-month period in order to bond with new born or adopted children, or to care for sick family members or ailing parents. The policy benefits women, especially young women, as they are more prone to take such a leave. However, the effect of the policy on overall labor market outcomes is less clear. We apply difference-in-difference techniques to identify the effects of the CPFL legislation on young women\u27s labor force participation and unemployment. We find that the labor force participation rate, the unemployment rate, and the duration of unemployment among young women rose in California compared to men (particularly young men) and older women in California, and to other young women, men, and older women in states that did not adopt PFL. The latter two findings regarding higher young women\u27s unemployment and unemployment duration are unanticipated effects of the CPFL program. We utilize robustness checks as well as unique placebo tests to validate these results