Estimating Usage and Costs of Alternative Policies to Provide Paid Family and Medical Leave in the United States Issue Brief

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Release Date: January 01, 2017

Estimating Usage and Costs of Alternative Policies to Provide Paid Family and Medical Leave in the United States Issue Brief

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About the Brief

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The brief summarizes a simulation analysis of five different paid family and medical leave model programs based on working programs in three states and a federal proposal, all applied to the national workforce. The analysis simulates worker behavior and estimates how many paid leaves would be taken under each model, the average weekly benefit level for each leave, and the total costs of the benefits paid. The analysis estimates the cost of benefits in dollars and as a share of total payroll for the nation as a whole and across industries and establishments of different sizes. As a share of national payroll, total benefits estimated to be paid out range from 0.45 percent to 0.63 percent of payroll depending on the generosity of the model simulated. A national policy of paid family and medical leave would fill a large existing gap in American workers’ income security. Most workers lack sufficient paid time off reserved for substantial family and medical needs. The 2015 National Compensation Survey (NCS) reports that only 13 percent of workers have access to paid leave specifically to care for a newborn child, adopted child, a sick child, or a sick adult relative.

Key Takeaways

  • A national paid family and medical leave policy would increase workers’ leave taking, paid and unpaid, by 6 to 11 percent annually, depending on the model policy.
  • Paid leaves taken would average from $428 per week to $493 per week, depending on the model program, all well below the maximum benefit available.
  • Benefits under national paid leave policy models cost between 0.45 and 0.63 percent of payroll.
  • Under all models nearly three-fourths of family and medical benefits paid out is for the worker’s own health; the share going to maternity and child bonding ranges from 13 to 23 percent depending on the model policy.

Citation

IMPAQ International. (2017). Estimating Usage and Costs of Alternative Policies to Provide Paid Family and Medical Leave in the United States Issue Brief—Worker Leave Analysis and Simulation Series. Chief Evaluation Office, U.S. Department of Labor.

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The Department of Labor’s (DOL) Chief Evaluation Office (CEO) sponsors independent evaluations and research, primarily conducted by external, third-party contractors in accordance with the Department of Labor Evaluation Policy and CEO’s research development process.