Paid Leave Pays Off: The Effects of Paid Family Leave on Firm Performance

Paid Leave Pays Off: The Effects of Paid Family Leave on Firm Performance

Benjamin Bennett, Isil Erel, Léa H. Stern, Zexi Wang

Series number :

Serial Number: 
643/2019

Date posted :

December 04 2019

Last revised :

January 12 2021
SSRN Share

Keywords

  • PFL • 
  • Labor Force Participation • 
  • Gender • 
  • diversity • 
  • Talent Allocation • 
  • Firm performance

We explore how lowering labor market frictions for female workers affects corporate performance. Using the staggered adoption of state-level Paid Family Leave acts, we provide causal evidence on the value created by relieving frictions to accessing female talent, for private and public firms.

Reduced turnover and an increase in female leadership are potential mechanisms that contribute to performance gains. Across specifications, our estimates indicate that treated establishments’ productivity increases by about 5% relative to neighbor control establishments. The treatment effect is larger when workers are in less religious counties and in those with more women of childbearing age.

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Authors

Real name:
Benjamin Bennett
Real name:
Léa H. Stern
Real name:
Zexi Wang