Women with Access to Leave Benefit from Higher Wages and Better Employment Outcomes

For Immediate Release: April 6, 2005

Contact: Lynn Erskine, 202-293-5380 x115

Washington, DC - Mothers with access to maternity leave earn more as they move through their careers, according to a new study by the Center for Economic and Policy Research (CEPR).

The study, "Family-Friendly Policies: Boosting Mothers' Wages ," found that wages of mothers who worked prior to the birth of their first child and received paid maternity leave were 9 percent higher than mothers who had not taken leave (controlling for other factors).

"An early investment in women - giving them access to a break from work for the birth of their child - pays off in higher lifetime earnings and better employment outcomes," said Heather Boushey, CEPR economist and author of the study.

Over their lifetimes, women earn less than half of what men earn. The lack of family-friendly policies and the presence of children contribute to women's lower lifetime earnings. Most women must "self-finance" for the birth of their child -- taking unpaid leave or quitting their jobs. Providing universal access to leave could help close the gap in women's pay and enable more women to stay in the labor market over time.

"Providing paid leave for new mothers is relatively cheap," said Boushey. "In California, every worker now has access to six weeks of paid leave. The program, which went into effect in June 2004, is funded by a payroll tax that costs about $50 per worker annually."

The report also examined the impact of flexible schedules on wages and job tenure. Flexible schedules allow workers to balance work responsibilities with family commitments, such as caring for children or aging parents. Rather than lowering wages, flexible schedules had no effect on earnings, according to the study. However, few women (less than one-third) have access to a flexible schedule.

"Relying on the goodwill of employers has meant that many workers, especially low-wage workers, do not have access to any kind of flexibility," said Boushey. "A restrictive workplace is not an individual problem, it's a threat to all families and should be addressed with new policies."