Economic Security and the Birth of a Child: Three Essays on Employment, Income, and Paid Leave Among Parents of Newborns

Abstract

This dissertation focuses on parents of newborns around the time a child is born, examining the economic conditions of parents around a birth and exploring the potential of public policies to promote economic stability for families around this time. The first chapter uses administrative microdata from birth certificate and earnings records to analyze patterns of earnings and employment among parents who welcomed a new baby between 2010 and 2016 in Washington State. I present a detailed analysis of parental earnings patterns around childbirth, tracking employment rate, earnings and hours levels, employer continuity, and earnings volatility in the two-year period around a birth for all parents and for mothers disaggregated by racial and ethnic identity, educational attainment, and wage rate quintile. Next, I examine household-level measures of earnings and safety net program income in the time around a birth. I find that parents in Washington State experience substantial earnings volatility when a child is born. Aggregating earnings of both parents listed on a given birth certificate to calculate household-level income measures does attenuate the volatility faced by individual parents, but substantial economic instability still remains. For example, over half of Washington households see their income fall by half or more during the year around a birth. Use of means-tested programs increases in the perinatal period, which offsets earnings volatility slightly (especially for single mother households) – but household earnings remain volatile even with the addition of these sources of income. The second chapter studies paid leave programs, which many states have recently enacted. Paid leave policies differ significantly across states, and the implications of these policy differences remain under-studied. This paper assesses the implications of state policy design features for the share of parents eligible for paid leave, as well as for disparities in eligibility across parent demographic, socioeconomic, and employment characteristics. I use administrative microdata from Washington State to simulate working parents’ eligibility for claiming paid leave under ten different states’ policies. State policy designs differ dramatically in terms of overall generosity and disparities in eligibility across subgroups. In general, policies that are less restrictive and allow more parents to access paid leave also significantly narrow disparities in who is eligible. State policies with more stringent employment requirements disproportionately exclude mothers (versus fathers); mothers working in low-wage jobs; mothers with lower educational attainment; and Black, Indigenous, and Latina mothers from qualifying for paid leave. Finally, the third chapter focuses on one such paid leave policy, Washington State’s Paid Family and Medical Leave (PFML) program. Starting in 2020, parents who worked at least 820 hours in the year before a birth qualify for up to twelve weeks of paid leave to bond with a new child, and mothers can take additional leave for pregnancy and related health conditions. I describe use of the policy in its first few years, using multiple sources of administrative microdata: health insurance data on birth-related insurance claims from the Washington State All Payer Claims Database and employment and paid leave records from the state’s Employment Security Department. These records enable me to identify a population of potential policy users, precisely estimate policy eligibility and take-up, and estimate how PFML use affected employment. I find that a majority of eligible Washington mothers who gave birth between 2020 and 2022 use PFML at some point during the perinatal period. Take-up increases between 2020 and 2022 as the policy rolls out, especially for medical leave. Analysis of policy take-up by mother characteristics reveals some important disparities. For example, results suggest that eligible Native Hawaiian/Pacific Islander and American Indian/Alaska Native mothers are less likely to take up paid bonding and medical leave than mothers identifying with other racial and ethnic groups. Mothers in more urban areas are more likely to take up both types of leave. There are also sharp disparities by wage rate; for example, only 30 percent of eligible mothers in the lowest-wage jobs took up bonding leave compared to 67 percent of mothers in the highest-wage jobs. Regression discontinuity analyses of the local average treatment effect of PFML eligibility on employment among mothers around the eligibility threshold find mixed results. There is some evidence that eligibility for PFML has small negative effects on employment status and intensity (i.e., hours worked) in the short term. However, this largely does not translate into significant reductions in total earnings (including wages plus PFML benefits), suggesting that mothers who are just eligible for the policy, on average, are able to spend more paid time off with their children without seeing reductions in overall income. Among mothers who worked following a birth, PFML eligibility led to an increase in continuity of work with the same employer.