Paid Parental Leave and Its Effects on Wage Replacement Rate and Employee Turnover
Institution
Western Kentucky University
KY House District #
20
KY Senate District #
32
Faculty Advisor/ Mentor
Lauren McClain, PhD.
Department
Sociology
Abstract
In the United States, paid leave policies have developed slowly compared to other UN member states and OECD countries. Other countries provide mandated paid parental leave of 10 months or more, while the United States only mandates 12 weeks of unpaid leave. The lack of support likely results in parents having to choose between taking little or no time to be with their new baby (and for birthing women to recover physically) or to bear a financial burden due to taking unpaid time off. Some employers offer a paid parental leave benefit but in the absence of a mandatory policy, there is unequal access that likely leads to inequity in who has access (highly educated, higher paid, in demand employees) and who does not (less education, hourly or lower paid, easily “replaceable” employees). The US also lacks a culture of leave-taking such that it is possible that even if the benefit is offered, employees may not take full advantage of it and/or employers may not be supportive of employees who do. Given the lack of data in the US, several questions about access to paid leave and its association with employee turnover and the supportiveness of employers remain unknown. The new Parental Leave Study is a quota sample of parents in the United States who had a baby in the last 2 years (n = 2649). This study examines the relationship between access to and use of paid leave, type of leave taken, wage replacement rate, employer supportiveness, and the likelihood of returning to work for the same employer to determine how leave options are associated with employee turnover. As employee turnover is costly to employers, it is important to examine what contributes to employee turnover and what is associated with loyalty to the pre-baby employer.
Paid Parental Leave and Its Effects on Wage Replacement Rate and Employee Turnover
In the United States, paid leave policies have developed slowly compared to other UN member states and OECD countries. Other countries provide mandated paid parental leave of 10 months or more, while the United States only mandates 12 weeks of unpaid leave. The lack of support likely results in parents having to choose between taking little or no time to be with their new baby (and for birthing women to recover physically) or to bear a financial burden due to taking unpaid time off. Some employers offer a paid parental leave benefit but in the absence of a mandatory policy, there is unequal access that likely leads to inequity in who has access (highly educated, higher paid, in demand employees) and who does not (less education, hourly or lower paid, easily “replaceable” employees). The US also lacks a culture of leave-taking such that it is possible that even if the benefit is offered, employees may not take full advantage of it and/or employers may not be supportive of employees who do. Given the lack of data in the US, several questions about access to paid leave and its association with employee turnover and the supportiveness of employers remain unknown. The new Parental Leave Study is a quota sample of parents in the United States who had a baby in the last 2 years (n = 2649). This study examines the relationship between access to and use of paid leave, type of leave taken, wage replacement rate, employer supportiveness, and the likelihood of returning to work for the same employer to determine how leave options are associated with employee turnover. As employee turnover is costly to employers, it is important to examine what contributes to employee turnover and what is associated with loyalty to the pre-baby employer.