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The issue brief provides a benchmarking study of the Worker Paid Leave Usage Simulation (Worker PLUS) Model’s Benefit Financing module. Researchers compare payroll tax revenue estimates from Worker PLUS to actual program administrative data for three state paid leave programs (California, New Jersey, and Rhode Island). The study shows that the Benefit Financing module produces conservative revenue estimates in these cases, by underestimating the payroll tax revenue by about 10% to 15%. The underestimation may be driven by a set of limitations of the American Community Survey data files, including earnings’ top-coding, earnings’ misreporting, inclusion of business losses in earnings, and a lack of information on employee opt-in choices for paid leave programs. Despite these limitations, the payroll tax revenue estimates from the Benefit Financing module can provide a starting point for feasibility studies on state paid leave programs. Further improvement of these estimates can be achieved with additional data sources, such as administrative data from state workforce agencies.

Citation

IMPAQ International. (2021). Worker Paid Leave Usage Simulation (Worker PLUS) Model: Benchmarking Results of the Benefit Financing Module’s Payroll Tax Revenue Estimates. 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.