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Paid Family Leave Can Help Close the Gender Pay Gap

Equal Pay Day is a sobering reminder of the challenges women face in the labor market and the ongoing gender disparities in the US economy. In 2019, the median earnings of full-time, year-round female workers were 82.3% of that of men. Among the multiple, complex societal and economic factors that contribute to the gender pay gap, caregiving responsibilities impact female earnings by influencing their career choices and causing significant work interruptions. As lawmakers consider options for supporting female advancement in the labor market, expanding paid family leave would increase women’s labor force attachment, improve their job continuity, and empower them to pursue higher-earning occupations—all helping close the gender pay gap.

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Caregiving and the Gender Wage Gap

As increasing numbers of women joined the workforce in the 20th century, many began facing what Isabel Sawhill and Katherine Guyot of the Brookings Institution call “the time squeeze,” and had to make difficult choices in their careers to meet family caregiving demands. Research shows that because of caregiving—particularly for children—women more frequently than men experience career interruptions that can have long-term negative consequences for their earnings. Moreover, women tend to value job qualities that support caregiving, such as job security and workplace flexibility, over more demanding and riskier jobs with higher earnings growth. The combination of these factors contribute to what researchers call the “motherhood wage penalty.” For decades following childbirth, mothers tend to earn lower wages and work less than fathers, as well as both men and women without children.

Perhaps at no time has the impact of caregiving on women in the workforce been more apparent than in the face of historic caregiving responsibilities during the COVID-19 pandemic. An October 2020 Pew Research survey found that more mothers than fathers felt that they needed to reduce their work hours (34% vs. 26%) or even turn down a promotion (9% vs. 3%) in order to balance work and parenting responsibilities during the pandemic. A BPC-Morning Consult survey found that women were twice as likely as men to say they left work for caregiving responsibilities due to childcare provider or school closures. As a result, among parent-age workers, women have lagged behind men in the economic recovery and are substantially more likely to remain out of the labor force. In particular, as of February 2021, there has been a loss of about 1.5 million parent-age women from the labor force.

Paid Family Leave Improves Female Workforce Outcomes

Expanding access to paid family leave would both support long-term female workforce outcomes and help women return to the workforce during COVID-19.

State-level paid family leave programs increase labor force attachment, hours worked, and earnings among new mothers. Studies show that California’s paid leave program increased weekly work hours of employed mothers by 10% to 17%, and it increased the likelihood of female employment one year after childbirth by 23%. Another study found that women who take paid family leave after giving birth are 40% more likely to return to work than those without the benefit. The benefits of paid family leave also extend beyond just a few years. Researchers have shown that a decade after childbirth, the labor force participation rate among women who received paid family leave is 82%, compared to 64% of women who quit during pregnancy.

Paid family leave would also help women pursue and stay in high-wage careers that are typically dominated by men. A recent policy memo in the Journal of Science Policy & Governance highlighted that mothers are substantially more likely than fathers to leave STEM-related occupations following the birth of a child. A paid family leave benefit would provide caregivers with additional support to pursue and build careers in STEM and other high-growth fields.

Finally, surveys show that paid family leave is an important component of helping women return to the labor force and, in turn, support the U.S. recovery from the COVID-19 pandemic. For instance, a July 2020 BPC-Morning Consult poll found that nearly two out of three workers on unemployment insurance (63%) say that they would be more likely to return to work sooner if they had access to paid family leave.

Conclusion

Equal Pay Day recognizes the reality that there are disparities between the earnings of men and women in the United States. By supporting job continuity, employment, career advancement, and labor force participation, expanding paid family leave would increase the lifetime earnings of mothers and take an important step in closing the gender wage gap.

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