Policy Analysis No. 108

Mandatory Family-Leave Legislation: The Hidden Costs

By Deborah Walker
June 8, 1988

Executive Summary

Today over half the women in the United States choose to work outside the home, representing approximately 44 percent of the labor force. Furthermore, 73.4 percent of these women are of child-bearing age, and many will, at some point, leave work to have a baby.(1) These facts are clear, but the social and economic issues that surround them are not. For many women pregnancy could translate into the loss of a job or, at the least, a step down the corporate ladder.

Should the United States follow the lead of most other industrialized countries and require employers to offer a family-leave benefit to their employees? Would such legislation take much of the burden off those women who are trying to juggle a career and a family? Or would the legislation instead place costly demands on employers, forcing them to decrease employment opportunities, especially for women?

This study will explore the many questions that should be answered before this country considers a national family-leave policy. As with all economic regulation, the costs and benefits are difficult to identify and can never be measured precisely. We can, however, specify many costs and benefits that often hide within the complexities of our political and economic systems. Identifying and understanding these costs and benefits is crucial to the well-being of everyone in this country.

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Deborah Walker is an assistant professor of economics at Loyola University in New Orleans.