Abby McCloskey, Angela Rachidi, Peyton Roth, AEI, October 7, 2020

While the academic and political case for paid leave advanced considerably in recent years, questions remain regarding how a national paid leave program would affect low-wage workers.
Research shows that many existing paid leave programs in the US and other countries impose costs on vulnerable populations due to regressive funding sources and fewer benefits to low-income parents caused by this group’s low program take-up rate.
However, paid family leave programs offer significant advantages for low-income parents, increasing parents’ access to paid time off and benefiting low-income children financially and developmentally.
Balancing these findings requires designing a public paid family leave program that supports low-wage working parents, limits private-sector benefit crowd out, and reduces the regressivity of funding.