As Congress prepares to vote on a social spending bill, SIEPR’s Jacob Goldin explains why economists are rallying behind the child tax credit.
In a blow to arguments that a federal paid leave law would harm small businesses, a new study co-authored by Stanford’s Maya Rossin-Slater finds that support for paid leave among small employers is not only strong, but also increased as the pandemic added new strain to the work-life juggle.
“The big roadblock to passing paid family leave legislation is a concern that small businesses are not supportive and that it would be challenging for them,” Rossin-Slater says. “We find that’s not the case.”
The research, released this week by the National Bureau of Economic Research as a working paper, finds that 71 percent of New York and New Jersey employers surveyed during COVID-19 said they backed paid family leave — up from nearly 62 percent in 2019, before the coronavirus outbreak. What’s more, the study finds the jump in support was driven by employers that were previously opposed to the policy, and not just neutral about it.
Rossin-Slater, an associate professor of health policy and a senior fellow at the Stanford Institute for Economic Policy Research (SIEPR), also finds that views about paid family leave became more favorable among employers with at least one worker who used it during the pandemic. Both New York and New Jersey offer the benefit under state law. The employers were also subject to a temporary paid family leave provision that was included in a 2020 federal stimulus package but has since expired.
The study comes at a critical moment in the years-long, bipartisan effort to pass a federal law providing workers with partially paid leave to take time off to care for family or their own medical issues. The United States is one of six countries without national paid leave — despite polls showing Americans overwhelmingly want it. A plan to offer four weeks of paid leave is part of President Biden’s proposed Build Back Better Act, which the House of Representatives is expected to vote on soon.
Opponents of current and past efforts to pass federal paid leave legislation say that it would be too costly and burdensome, especially for small employers. Rossin-Slater dented that argument in a separate study earlier this year of the impacts of New York’s paid leave policy on select indicators of profitability. She and her co-authors found that small businesses were not adversely affected by the policy on these measures, and actually reported that it was easier to deal with worker’s absences once the policy was in place.
This latest study will be published in a journal of the American Sociological Association, Socius: Sociological Research for a Dynamic World.
The findings are not only timely, but they also provide the strongest evidence yet of how COVID has changed employers’ minds about paid family leave, Rossin-Slater says. Since 2016, she and her co-authors — Ann Bartel, Meredith Slopen, and Jane Waldfogel of Columbia University, and Christopher Ruhm of the University of Virginia — have been surveying employers with 10-99 employees in New York, New Jersey, and Pennsylvania to learn about the effects of paid family leave. As part of their annual questionnaire, they have asked firms in New York and New Jersey to share their overall attitudes toward the policy. This is how they were able to reliably gauge in this latest study how small business owners and managers were feeling about paid leave on the eve of the pandemic.
Another advantage of the survey is that it focuses on employers’ experiences with paid family leave during COVID and not, as most other polls have done, only on workers.
Rossin-Slater says that assessing employers’ overall attitudes, in addition to measuring effects on operational issues, provides further evidence as to whether businesses are harmed by paid leave.
“Actual views provide a summary of how businesses think the policy is affecting operations,” she says. “If it was a disaster and really hard for them, they’re probably not going to be very supportive. The opposite is likely if their experience was smooth and not complicated.”
In all, 539 New York and New Jersey businesses that participated in the 2019 survey also responded in 2020, rating their opinions on paid family leave according to a 5-point scale. The researchers analyzed changes in opinions within each firm and controlled for other factors that could have changed over the time period, such as the total number of employees and their characteristics. They found that the share of employers reporting that they were very or somewhat supportive of the policy rose by 9.6 percentage points, from 61.6 percent to 71.2 percent. Meanwhile, the portion of firms that were somewhat or very opposed declined by 8.8 percentage points, to 11.2 percent.
The increase in support was somewhat larger among employers with 50-99 workers, although the rise in favorable opinions was also meaningful among even the smallest employers in the study. The researchers also found that employee use of state paid leave during COVID was associated with more favorable employer views.
“What’s striking,” Rossin-Slater says, “is that during COVID — when it’s become incredibly clear how important it is for workers to be able to take time off work with pay and job protection to care for ill family members or for kids who are out of school — employers became even more supportive of paid family leave.”
Rossin-Slater says that one drawback to the study is its relatively small sample size. Over the years, she and her collaborators have surveyed 4,711 employers. Of the 1,151 that responded to the 2020 survey, 887 were operating. About two-thirds of those still in business answered questions about their attitudes toward leave and whether workers used it during the pandemic.
Even so, shedding any light on what employers think about paid family leave is important, she says.
“As economists, we focus a lot on measurable impacts like productivity or turnover rates, and those are important to quantify,” Rossin-Slater says. “But at the end of the day, whether these policies get passed is ultimately a political question, and people’s attitudes shape the public discourse in this country. Understanding how attitudes change, especially during a pandemic, is insightful for thinking about where this policy is ultimately headed.”