The impact of paid family leave on employers: evidence from New York

Abstract

To study the impacts of New York’s 2018 Paid Family Leave (PFL) policy on employer outcomes, we designed and fielded a survey of small firms in New York and a control state, Pennsylvania, which does not have a PFL policy. We match each NY firm to a comparable PA firm and use difference-in-differences models to analyze within-match-pair changes in outcomes. Contrary to common concerns about the burdens of PFL on employers, we find no evidence that PFL had any adverse impacts on employer ratings of employee performance or their ease of handling long employee absences. Instead, we find suggestive evidence of an improvement in employers’ ratings of employee commitment and cooperation, concentrated in the first policy year. We also observe an increase in employers’ ratings of the ease of handling employee absences in the first policy year. Lastly, we find a rise in the incidence of employee leave-taking in the second policy year, driven by the smallest firms in our study.