The Importance of Paid Leave for Caregivers
The Importance of Paid Leave for Caregivers
Labor Force Participation Effects of California’s Comprehensive Paid Family and Medical Leave
Comprehensive paid family and medical leave not only helps workers care for their families but keeps them in the labor force, thus boosting the entire U.S. economy.
Part of a Series
In this article
Introduction and summary
In recent years, the public has engaged in a more rigorous dialogue about the dual demands of work and family and for modern workplaces that are more responsive to diverse family needs. Paid family and medical leave has emerged as an important step toward modernizing the workplace. Research consistently shows that both men and women—across race, ethnicity, gender, economic status, age, and political affiliation—support a comprehensive program to provide paid family and medical leave to assist with family caregiving or personal medical needs.1
A persistent partisan divide among lawmakers at the federal level, however, has stalled any opportunity for progress. Paid family and medical leave opponents in Congress reject calls for a comprehensive federal program and instead argue for lesser, voluntary measures. Amid this stalemate, the push for paid family and medical leave took on new energy when, for the first time, both of the major party candidates in the 2016 presidential election put forward their version of a paid leave plan. The Clinton plan proposed a national paid family and medical leave program, but the Trump plan was narrower, proposing a plan to offer solely paid maternity leave and no other types of paid leave.2 The narrower Trump proposal, which post-inauguration was modified into a paid parental leave proposal, reinforced the frequent narrative around paid family leave: It focused the most attention on the needs of new parents and less attention on other caregiving concerns, such as caring for an aging parent or ill spouse.
Most workers in the United States take family and medical leave to care for a sick family member or oneself;3 the elevation of parental leave deprioritizes and ignores workers’ most common caregiving needs. Everyone will require care at some point during their life besides when they are first born. Aging people, for example, usually receive care from a child, spouse, or another family member who often needs to balance their work and their caregiving responsibilities. A paid family and medical leave program that in actuality only covers parental leave is insufficiently comprehensive to help American families as well as the overall economy.
In a 2016 report, “The Cost of Work-Family Inaction,” the Center for American Progress found that the lost wages from lack of access to paid time off cost the American economy $20.6 billion per year.4 This report follows up on those findings, using new data analysis to determine that access to universal paid leave under California’s long-standing paid leave program significantly increased the labor force participation of those who were caring for family members. Specifically, we found an 8 percent increase in labor force participation in the short run and a 14 percent increase in labor force participation in the long run.5 This finding is significant because individuals who experience increased and sustained labor force participation can maintain their income and see more wage growth over their lifetime.6 Higher labor force participation is also an indicator of a stronger labor market, with more opportunities for workers.
Any paid leave plan that does not address the myriad reasons other than maternity leave that require workers to take time away from work will fall short of addressing both families’ needs as well as the potential economic benefits of a comprehensive program.
Current status of paid family and medical leave in the United States
Currently, the only federal policy that ensures access to time off to care for others is the Family Medical Leave Act (FMLA), which was passed in 1993 and guarantees eligible workers access to unpaid leave for up to 12 weeks in a 12-month period.7 Eligibility for leave through the FMLA is dependent on how many hours an individual worked in the past year and the size of the employer they work for; because of these requirements, roughly 40 percent of workers don’t have access to the FMLA.8
Of those covered by the FMLA, some may receive some pay while on leave, usually through paid vacation, sick leave, or other paid time off. But rates of pay drop for leaves longer than 10 days, since sick leave is generally full wage replacement and paid family and medical leave is typically partial wage replacement. Paid family and medical leave programs usually provide longer periods of leave beyond what is covered through access to paid sick leave, which may be used to cover short-term leaves.
The difference between paid sick days and paid family and medical leave
Paid sick days and paid family and medical leave are two different types of paid time off from work to care for oneself or family. Paid sick days provide pay for short-term medical needs, including a temporary illness or to get medical care for oneself or a family member, such as bringing a child to the doctor. Paid family and medical leave provides pay for medical or family caregiving needs that require more time off of work, commonly conceived of as time off for the birth or adoption of a new child, but can also include recovery from a serious illness or to attend to a family member who requires more medium-term care from a family member. More information can be found in the CAP issue brief “Paid Leave 101.”9
However, while the FMLA guarantees the ability to take time off to care for a family member, dependent on working hours and employer size, it does not guarantee pay for time off. According to analysis of the U.S. Bureau of Labor Statistics’ National Compensation Survey,10 only 14 percent of workers had access to paid family and medical leave in 2016. A statewide program guaranteeing paid time off for family caregiving only currently exists in three states: California, Rhode Island, and New Jersey. Other states—including New York and Washington—have passed paid leave plans that have not gone into effect. Without broader adoption of a national paid leave program, many will continue to struggle to balance work with caregiving responsibilities and, furthermore, the economy will lose out on earnings and decreased labor force participation.
Workers need comprehensive paid family and medical leave to care for their families throughout the life cycle
Everyone requires care at some point in their life—often from family members or close friends who may need to take time off from work to meet these caregiving needs. Seventy percent of people turning age 65 can expect to need some form of medium- to long-term care during their lives that would require a family member to take leave from work beyond what would be covered by paid sick time off.11 About 80 percent of care at home is provided by unpaid caregivers—mostly women—and may include emotional, financial, nursing, social, and homemaking, as well as other personal services or tasks.12 As the U.S. population ages, more and more workers will become involved in providing unpaid care. Paid family leave, to the extent that it allows workers to remain in the labor force while caring for aging relatives, can boost labor force participation and employment rates.
While some family caregivers can take unpaid leave through the FMLA, an even larger number have an unmet need for leave either because they are ineligible for FMLA leave or they are eligible but cannot afford to take unpaid leave. New analysis by CAP in “Rhetoric vs. Reality: 4 Myths About Paid Parental Leave” found that of the 7 million workers with an unmet need for family and medical leave, 35.8 percent needed family caregiving leave but were unable to take it, with the most common reason given being because they cannot afford to take unpaid time off.13
A survey of 7,660 people by the AARP and the National Alliance for Caregiving14 found that 18.2 percent of respondents reported being caregivers for someone else, with 85 percent of those respondents receiving care being a relative of the person who is giving care. According to the survey, 60 percent of caregivers are also employed, and a little more than half of employed caregivers are working full time. These caregivers provide a crucial service to both their family members as well as society. In order to balance caregiving responsibilities with workplace security, however, workers need policies that allow them to manage the time for both and take leave from work for intensive caregiving needs.
The FMLA grants many employees access to unpaid family and medical leave, but most workers could not afford to take unpaid time off for family caregiving without some guaranteed replacement income. As a result, many employees are often forced into untenable situations that can jeopardize their family stability. Some workers may need to work an excessive combination of paid formal employment hours and unpaid family caregiving hours or withdraw from the labor force entirely in order to address intensive caregiving needs. Still, other workers may need to cut their hours—and potentially reduce their income—due to time constraints from caregiving responsibilities.
Too often, the public narrative ignores the many other reasons besides caring for a new child that require workers to take leave from their jobs. According to the U.S. Department of Labor,15 new children account for 21 percent of FMLA-type leaves. More than half of FMLA-type leaves—55 percent—are taken by individuals who need to address their own illness. But another significant portion, 18 percent, are taken to care for a parent, spouse, or child—other than a new child.16 A comprehensive paid family and medical leave program, therefore, must address the full scope of workers’ caregiving needs.
California’s paid family leave policy
California has the longest-running paid family and medical leave program in the United States. In 2004, the state implemented a paid family leave policy, known as CA-PFL, which provides workers access to six weeks of partially paid leave to care for a newborn or for sick family members.17 CA-PFL applies to almost all workers,18 with no restrictions on firm size or minimum hours. It offers a 55 percent wage replacement19 but does not contain any job protection unless CA-PFL is taken simultaneously with FMLA leave. On September 12, 2017, the California Legislature passed the New Parent Leave Act, or S.B. 63, which guaranteed job protection to all new parents, not only those also eligible for the FMLA, when they take time off to bond with a new child.20
Previous research has shown that a paid leave policy such as California’s has positive effects for women’s labor force participation. Economist Tanya Byker found that paid leave laws in California and New Jersey are associated with a substantial increase in women’s labor force attachment21 in the months directly around birth, especially for women in jobs with lower educational requirements.22 Economists Charles Baum and Christopher Ruhm found that rights to paid leave in California are associated with higher work and employment probabilities for mothers nine to 12 months after birth.23 They also found positive effects of California’s program on hours and weeks of work, as well as on wages, so mothers seeking more hours are both able to work more and earn more. Another study on California’s paid leave policy, conducted by economists Tirthatanmoy Das and Solomon Polacheck, found that the labor force participation rate; the unemployment rate; and the duration of unemployment among young women rose in California compared with men and older women in California as well as other young women, men, and older women in states that did not adopt a paid family leave policy.24
These studies have shown the benefits to mothers and young families. The majority of workers who take leave, however, are not new parents, but rather they are workers who take time off to care for a sick child, spouse, parent, or other family member, as well as those who take time off to care for themselves during an illness. This report looks at the effect of California’s paid leave policy on the labor market outcomes for those who are providing unpaid care or assistance to a family member or a friend who has a long-term illness or disability. As our care needs increase across the country with an aging population, it is important to understand how comprehensive paid family leave benefits the entire economy by allowing workers to take time off while continuing to earn income and maintain their attachment to the labor force.
Analysis of the labor participation effects of paid family leave on family caregivers
To understand the importance of a comprehensive paid family and medical leave policy that provides for family caregivers as well, we compare the labor force participation of those who currently provide unpaid care to a family member with the rates of participation of those who did so before the policy. We refer to those who are giving unpaid care to others as family caregivers. Labor force participation includes both workers who are employed and individuals who are unemployed but looking for work.
To measure the effect of California’s paid leave program, the authors analyzed data from the 2001, 2004, and 2008 Survey of Income and Program Participation (SIPP) care module, which gathers information on people who provide regular unpaid care or assistance to a family member or friend who has a long-term illness or a disability. (For details on the SIPP survey, see Appendix)
According to the SIPP care module, 4 percent of nonbusiness owners provided care for a family member in 2003 and 2004; this increased to 6 percent in 2011. (see Table 1) Unpaid family care providers tend to be slightly older than those who don’t provide unpaid care. Additionally, they come from all races and ethnicities but are less likely to be Asian than of another race in the survey.25 (see Table 7)
Most unpaid care providers have an associate degree or higher-level educational degree. This overrepresentation of higher educated workers probably reflects the fact that better educated workers are more likely to have the resources to take time away from work to care for their loved one.26 Finally, more unpaid care providers participate in the labor force, which may be due to their older age, but more of those who work do so part time, which is defined as working for less than 36 hours on their primary job.
More than 80 percent of family caregivers are providing care for one person, with 14 percent providing care for two people and 4 percent providing care for three people. (see Table 2) Unpaid care providers who provide care for someone within their own household are most likely caring for their spouse, parent, or child. If they are providing care for someone outside their household, they are most likely caring for their parent, relative, or nonrelative. (see Table 3)
Older Americans in particular depend on unpaid family caregivers. Combining the household and nonhousehold members receiving care, the persons most likely to receive unpaid care are parents. Forty-eight percent of persons receiving care through informal arrangements are age 61 or older.27 (see Table 4)
Family caregivers often spend many years in these informal care arrangements, which frequently develop at a significant cost to their careers.28 For many unpaid family caregivers, these informal arrangements require the same amount of time per week as a job. The SIPP data reveal that 18 percent of those giving unpaid care to a household member spend 21–39 hours a week doing so, and 38 percent of unpaid caregivers spend upwards of 40 hours a week on this activity. Paid family leave may allow these unpaid family caregivers to keep working while caring for their family, with the ability to take off periods of time where more intensive caregiving is required, such as an acute medical issue for the person they are caring for.
The number of hours spent caring for someone outside a caregivers’ own household, such as an elderly parent living elsewhere, are lower, with 9 percent of those caring for a nonhousehold member spending 21–35 hours a week and 4 percent spending upwards of 36 hours doing so. (see Table 5) A whopping 61 percent of those providing unpaid care to a household member have been doing so for three years or more, and the figure is 41 percent for those providing care to nonhousehold members. (see Table 6)
The introduction of a paid leave program is important to caregivers because it can allow them to take necessary leaves from work to carry out caregiving duties for their family members or close friends while maintaining a proportion of their earnings. Without these earnings, they would either not be able to provide care or they would need to withdraw from the labor market to do so.
Our results found that the implementation of CA-PFL did indeed increase the labor force participation of these caregivers by a significant amount. Two groups of people are affected by a paid leave program:
- Unpaid care providers who were working and for whom the availability of paid leave improves their ability to juggle work responsibilities with their unpaid care provision
- Unpaid care providers who were not working but were enticed to re-enter the labor market once paid leave became available
Following the implementation of CA-PFL, labor force participation of unpaid care providers increased by 8 percent in the short run in the 2006 survey and increased by 14 percent in the long run in the 2011 survey.
Labor force participation of caregivers increased 8 percent in the short run and 14 percent in the long run.
The increase in labor force participation was limited to women, who provide the majority of unpaid care to their families. Family caregivers from higher-income households had a larger increase in labor force participation than those from lower-income households in the short run, but in the longer run, the labor force participation rate of lower-income households overtook that of unpaid care providers from higher-income households.
While there was an overall increase in labor force participation, there was a decline in full-time work as workers transitioned to part-time work and were still able to maintain their access to paid leave under California’s comprehensive policy.29 This decline in full-time work was larger for men as well as low-income households.
Shortly after the implementation of California’s paid leave program, the full-time status of lower-income family caregivers fell by 20 percentage points compared with a 1 percentage point increase in the full-time status of lower-income people who were not caregivers. In other words, for lower-income people, those who were working full-time decreased to part-time while being caregivers. Higher-income caregivers had a 15 percentage point decrease in the rate of full-time work compared to a 1 percentage point increase for higher-income people who were not caregivers.
But in the longer run, the full-time status of lower-income family caregivers in California rose by 5 percentage points for a net decrease of 15 percentage points, so some of this effect was an immediate response to the policy implementation that began to slightly balance back upward after six years of the program. Among higher-income family caregivers, full-time status rose by one percentage point for a net drop of 14 percentage points in the long run.30
Overall, our results suggest that access to paid family leave after the implementation of California’s paid leave program helped family caregivers balance their responsibilities in their families and their jobs that required necessary income to maintain their livelihoods. This demonstrates that access to paid leave is a crucial part of the ability to care for one’s own family beyond the immediate need to take time off with a new child.
The ability to take time away from work to be able to care for a sick child, spouse, or parent is a vital part of maintaining attachment to the labor force for workers and strong labor force participation rates in the U.S. economy. As family caregiving needs increase with an aging population and as all people continue to need care at some point in their lives for illness, caregivers must balance both those responsibilities with their careers. Access to a paid family and medical leave program that provides for family caregiving will be crucial to their ability to do this.
Increased labor force participation is a benefit to the entire economy, boosting earnings and aggregate demand as well as encouraging a dynamic labor market. The long-term decline in labor force participation of both women and men in the U.S. economy has been a cause for concern by many. Some have speculated this decline in participation is because we have hit a threshold where families cannot manage their careers and their caregiving responsibilities without adequate work-life policy, including paid family and medical leave.31 As our results show, when families do have access, they are able to increase their labor force participation.
These positive benefits demonstrate that all people need a paid family and medical leave program that covers the variety of reasons people need time away from work to care for their families. A parental leave program is not sufficient for the broad caregiving needs of families. Not only is it essential to many families, but it is also important to the structure of our labor market that workers be able to take time off to care for a sick child, spouse, or parent, in addition to taking time off for a new child or one’s own illness.
For the complete Appendix of this report, see the PDF.
About the authors
Joelle Saad-Lessler is an associate industry professor of economics at the Stevens Institute of Technology’s School of Business. A labor economist with expertise in econometric modeling, statistical programming and in-depth data analysis, Saad-Lessler has authored a number of publications on the economics of retirement, local labor markets, and the economics of immigration. She holds a B.A. and Ph.D. in economics from Columbia University.
Kate Bahn is an economist at the Center for American Progress. Her work has focused on labor markets, entrepreneurship, the role of gender in the economy, and inequality. In addition to her work on the Economic Policy team, Bahn has written about gender and economics for a variety of publications, including The Nation, The Guardian, Salon, and The Chronicle of Higher Education. She also serves as the executive vice president and secretary for the International Association for Feminist Economics. Bahn received both her doctorate and master of science in economics from the New School for Social Research, where she also worked as a researcher for the Schwartz Center for Economic Policy Analysis.
- John Halpin and Karl Agne, “American Voters Did Not Endorse Trump’s Extremist Policy Agenda in 2016 Election” (Washington: Gerstein Bocian Agne Strategies and Center for American Progress, 2016), available at https://americanprogress.org/wp-content/uploads/sites/2/2016/11/CAP-2016PostelectionPollingMemo-Final.pdf; Lake Research Partners, “National Partnership for Women & Families National Omnibus January 28-31, 2016: 1,004 Total Sample, 808 Likely Voters,” available at http://www.nationalpartnership.org/research-library/work-family/fmla-23-lrp-poll-questionnaire.pdf.
- The Office of Hillary Rodham Clinton, “Paid family and medical leave,” available at https://www.hillaryclinton.com/issues/paid-leave/ (last accessed September 2017); Sean Sullivan and Robert Costa, “Donald Trump unveils child-care policy influenced by Ivanka Trump,” The Washington Post, September 13, 2016, available at https://www.washingtonpost.com/news/post-politics/wp/2016/09/13/donald-trump-joined-by-ivanka-trump-to-outline-child-care-policy/?utm_term=.357a18538b87.
- Jacob Alex Klerman, Kelly Daley, and Alyssa Pozniak, “Family and Medical Leave in 2012: Technical Report” (Cambridge, MA: Abt Associates, 2012), available at https://www.dol.gov/asp/evaluation/fmla/FMLA-2012-Technical-Report.pdf.
- Sarah Jane Glynn and Danielle Corley, “The Cost of Work-Family Policy Inaction: Quantifying the Costs Families Currently Face as a Result of Lacking U.S. Work-Family Policies” (Washington: Center for American Progress, 2016), available at https://americanprogress.org/issues/women/reports/2016/09/22/143877/the-cost-of-inaction/.
- The short-run analysis of the 2004 paid leave law compares SIPP data from 2003 with 2006. The longer-run analysis compares data from 2003 with data from 2006 and 2011.
- For example, the CAP report, “Calculating the Hidden Cost of Interrupting a Career for Childcare,” finds that withdrawing from the labor force for five years during prime working years for childcare can reduce a woman’s lifetime earnings nearly 20 percent. See Michael Madowitz, Alex Rowell, and Katie Hamm, “Calculating the Hidden Cost of Interrupting a Career for Childcare” (Washington: Center for American Progress, 2016), available at https://americanprogress.org/issues/early-childhood/reports/2016/06/21/139731/calculating-the-hidden-cost-of-interrupting-a-career-for-child-care/.
- This FMLA survey data includes those who take leaves of a short duration, less than one week, that would not be covered by FMLA protections.
- Klerman, Daley, and Pozniak, “Family and Medical Leave in 2012.”
- Kaitlin Holmes and Sarah Jane Glynn, “Paid Leave 101: Demystifying Paid Sick Days, Paid Family and Medical Leave, and Unsatisfactory Alternatives” (Washington: Center for American Progress, 2016), available at https://americanprogress.org/issues/women/reports/2016/11/02/292026/paid-leave-101/.
- Bureau of Labor Statistics, “Table 32. Leave benefits: Access, civilian workers, March 2016,” available at https://www.bls.gov/ncs/ebs/benefits/2016/ownership/civilian/table32a.pdf.
- Different family caregiving needs require different work-life policies to address. Short-term care, such as a family member who needs care for an acute, short-term illness or recovery from an operation, can be provided for with paid sick time off to care for a family member. Paid leave can cover medium-term care for a family member beyond what would be covered by paid sick time. Long-term care is indefinite care for the tasks of daily living that can be provided for by family caregivers with workplace flexibility or paid caregiving.
- U.S. Department of Health and Human Services, “LongTermCare.Gov,” available at http://www.longtermcare.gov (last accessed September 2017).
- Sunny Frothingham and Sarah Jane Glynn, “Rhetoric vs. Reality: 4 Myths About Paid Parental Leave” (Washington: Center for American Progress, 2017), available at https://americanprogress.org/issues/women/reports/2017/08/14/437285/rhetoric-vs-reality-4-myths-paid-parental-leave/.
- AARP Public Policy Institute and National Alliance for Caregiving, “Caregiving in the U.S.” (2015), available at http://www.aarp.org/content/dam/aarp/ppi/2015/caregiving-in-the-united-states-2015-report-revised.pdf.
- Klerman, Daley, and Pozniak, “Family and Medical Leave in 2012.”
- State of California Employment Development Department, “Paid Family Leave,” available at http://www.edd.ca.gov/Disability/Paid_Family_Leave.htm (last accessed September 2017).
- California’s paid leave program has minimal eligibility requirements that include $300 of taxable earnings in the base period. Unlike the eligibility requirements for the FMLA, there is no employer size requirement.
- Paid leave benefits were expanded in 2016 to provide 70 percent wage replacement for minimum wage workers and 60 percent wage replacement for workers earning up to $108,000 a year. For additional details, see Patrick McGreevy, “Brown signs California law boosting paid family-leave benefits,” Los Angeles Times, April 11, 2016, available at http://www.latimes.com/politics/la-pol-sac-paid-family-leave-california-20160411-story.html;
California Assembly Bill No. 908, April 11, 2016, available at https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB908.
- California S.B. 63, September 15, 2017, available at https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB63.
- Labor force attachment is when a person remains attached to the labor force through active employment, actively seeking work in unemployment, or temporarily out of the labor force but likely to re-enter. A person is not attached to the labor force when they have withdrawn entirely and is not likely to re-enter, such as a discouraged worker or a person with prolonged absences that decrease the likelihood of re-entering.
- Tanya S. Byker, “The Economics of Gender Paid Parental Leave Laws in the United States: Does Short-Duration Affect Women’s Labor-Force Attachment?”, The American Economic Review 106 (5) (2016): 242–246.
- Charles L. Baum and Christopher J. Ruhm, “The Effects of Paid Family Leave in California on Labor Market Outcomes,” Journal of Policy Analysis and Management 35 (2) (2016): 333–356.
- Tirthatanmoy Das and Solomon W. Polachek, “Unanticipated Effects of California’s Paid Family Leave Program,” Contemporary Economic Policy 33 (4) (2015): 619–635.
- The “residual race” is likely to be an individual of Hispanic ethnicity.
- More of unpaid care providers are married, widowed, divorced, or separated relative to those who were never married. This is largely because unpaid care is often provided for a spouse, so those who are providing this care are necessarily married.
- Based on authors’ analysis in the Appendix.
- A paid family and medical leave program may not fully cover those who spend a significant amount of time in unpaid family caregiving arrangements, who may also require long-term care supports as mentioned in endnote 11. But given the significant impact of the data results, the implementation of paid family and medical leave in California had a large enough impact on labor force participation rates that it included those who also are doing long-term unpaid family caregiving. See Meghan M. Skira, “Dynamic Wage and Employment Effects of Elder Parent Care,” International Economic Review 56 (1) (2015): 63–93.
- Findings showed there was not much difference in labor force participation effects by length of caregiving spell. However, there was a difference in the full-time status effects by length of caregiving spell, with longer-term unpaid care providers experiencing a sharp drop in full-time status of 18 percentage points in the short run and 11 percentage points in the longer run, compared with short-term unpaid care providers who had no change in full-time status. This finding supports a narrative where all unpaid care providers are drawn back into the labor market regardless of the length of the caregiving spell, but longer-term care providers in particular take advantage of the paid family leave law to adjust their hours of work to accommodate their roles as unpaid care providers.
- Lower-income unpaid care providers had a larger drop in full-time status than higher-income unpaid care providers, with the former experiencing a drop in full-time status of 21 percentage points (41 percent from a baseline of 0.51 before 2004) in the short run and 15 percentage points (29 percent) in the longer run, compared with the latter’s 16 percentage points (21 percent from a baseline of 0.78 before 2004) in the short run and 14 percentage points (18 percent) in the longer run. (see Table 9b) Again, the drop in full-time status resulted from a decline in weekly hours of 7.86–3.01 hours for workers from lower-income households and 1.6–0.83 hours for workers from higher-income households.
- Patricia Cohen, “Why Women Quit Working: It’s Not for the Reasons Men Do,” The New York Times, January 24, 2017, available at https://www.nytimes.com/2017/01/24/business/economy/women-labor-force.html.
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