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Parental Leave Legislation and Women's Work: A Story of Unequal Opportunities

Article first appeared online October 8, 2015

Sari Pekkala Kerr, economist and senior research scientist, Wellesley Centers for Women (WCW) at Wellesley College. 

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What was the genesis of the idea for your research/paper?

I have been working on topics related to the labor market my whole research career and have recently been interested in the impacts of the family-related policies on the labor market. I originally come from Finland where we have a (long) paid parental leave available for all workers, and we see the majority of new mothers returning to their jobs soon after the leave ends, as well as have a high overall labor force participation rate among women. After seeing the situation here in the U.S., I noticed that many new mothers had very little family leave available to them, and even fewer had paid leave available. I also noticed that many women opted out of the workforce or had to resort to a complicated mix of child-care arrangements to cover their work day. Upon reading the variety of studies related to parental leave in the U.S., I noticed that hardly any of them were looking at discrepancies in leave coverage between mothers across the whole income spectrum. This research agenda was motivated by the observation that the bulk of the available evidence related to the average coverage and average usage of parental leave.

In addition, I wanted to evaluate whether the federal and state level parental leave policies and available U.S. data would plausibly generate a setting where one could investigate the long-term impacts of parental leave for the new mothers. Although some academic studies have had success using e.g. data around the California Paid Leave, the publically available longitudinal data sets are just not large enough for that kind of study. Based on the very interesting findings from this current study, I am hoping to develop a larger research agenda that will focus on firm-level policies and utilize administrative data sets.

What is the main conclusion that becomes evident from your research? (Or, what is your main takeaway?)

The main conclusion from my research is that although the U.S. has a federally mandated family leave policy (the FMLA) it does not provide even the most basic parental leave coverage for many low-income women. The coverage could be greatly increased by changing the FMLA eligibility criteria, yet the lack of pay might still be a hurdle for most low-income women considering whether they can afford to take any leave.

What are some of the more interesting or surprising findings/conclusions did you find in the process of bringing this together?

For me it was surprising to see how noticeably the FMLA eligibility criteria “discriminate” against low-income women. To be eligible for family leave under the FMLA the employee must have been working for the same employer at least one year, more or less full-time (1,250 hours per year), and it only applies to firms with at least 50 employees. It is perhaps not that surprising that many low-income workers are employed in multiple part-time jobs at the same time and their employment relationships tend to be spotty. Therefore they are not eligible for the FMLA leave within any of their employment relationships. Moreover, their family income levels are such that it is hard to imagine how it would be possible to afford any extended unpaid leave within those budgets. The situation is very different for the high-income mothers who are also much more frequently eligible for employer sponsored paid leave.

Many prior studies have demonstrated that a parental leave of a moderate length is beneficial both for the mother and the baby, and the California Paid Leave evidence further seems to suggest that it is also not very detrimental for the employer firms. I think we need more data on the firm level impacts of paid leave, but given that all other developed countries have implemented such a system (many of them more than 30 years ago) it seems like it is worth figuring this out also in the U.S.

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Author's Bio

Sari Pekkala Kerr is an economist and a senior research scientist at the Wellesley Centers for Women (WCW) at Wellesley College. She joined the WCW in 2010. Dr. Kerr previously worked at the Government Institute for Economic Research in Helsinki. She also served as an adjunct professor or visiting scholar to the economics departments of MIT, Boston University, Wellesley College, and the University of Kent at Canterbury. Dr. Kerr also has private sector experience as an economic consultant for Charles River Associates and Keystone Strategy. Dr. Kerr received her Ph.D. from the University of Jyvaskyla in Finland in 2000.

Dr. Kerr’s research and teaching focus on the economics of labor markets, education and families. One strand of research evaluates how different schooling systems affect learning outcomes and economic mobility, especially for children from disadvantaged family backgrounds. A second strand examines the role of high-skilled immigration within the U.S. firms, and the overall economic impacts of immigration on the economy. Her most recent efforts quantify the effect of information on labor market prospects on students’ choices among study programs, and the impact of public policies on the coverage and usage of parental leaves across the family income distribution. She has published widely in journals such as Review of Economics and Statistics, Journal of Labor Economics, Journal of Public Economics.

Dr. Kerr is actively involved with the academic community in Europe and in the US. She is an active member of Helsinki Economics of Education Research Group (HEERG), a network of economists working on questions related to educational policies and outcomes, particularly in Finland. She has also served as the Scientific Secretary of the European Regional Science Association and as an international expert in the European Union Mutual Learning Panel on the Economics of Immigration. She co-chaired the Labor Economics Finnish Post-Doctoral Program for several years. She has also been a policy advisor regarding gender equality in labor markets and immigration.

Kerr received a University Diploma in Economics from the University of Kent at Canterbury in England, and her M.A. in Economics, Business Studies, Education and Linguistics and her Ph.D. from the University of Jyväskylä in Finland.