78% Support Family Leave Savings Accounts. Americans Would Pay $200 a Year, But Not Above $450, for Federal Paid Leave Program. Americans Aren't Willing to Cut Spending, Increase the Deficit, Have Fewer Employer-Provided Benefits, or Reduce the Number of Female Managers for Federal Paid Leave. New Mothers Say More Affordable Daycare, Flexible Work, and Telecommuting Options are More Important than More Paid Leave. FULL RESULTS (PDF)
The new Cato 2018 Paid Leave Survey of 1,700 adults finds that nearly three-fourths (74%) of Americans support a new federal government program to provide 12 weeks of paid leave to new parents or to people to deal with their own or a family member's serious medical condition. A quarter (25%) oppose establishing a federal paid leave program. Support slips and consensus fractures for a federal paid leave program, however, after costs are considered.
The survey found 54% of Americans would be willing to pay $200 a year in higher taxes, a low-end estimate for a 12-week federal paid leave program. However, majorities of Americans would oppose establishing a federal paid leave program if it cost them $450 a year in higher taxes (52% opposed) or $1,200 a year in higher taxes (56% opposed), the mid-range and high-range cost estimates respectively. (See below for explanation of cost estimates).
These low-, mid-, and high-range cost estimates are based on the most high-profile federal paid leave program proposed to date: The Family and Medical Insurance Leave Act (FAMILY Act). These specific numbers were generated using the bipartisan AEI-Brookings Working Group on Paid Family Leave's cost calculator. (See below for further explanation of the cost estimates).
The survey also did not ask questions about what paid leave policies Americans would like to see offered at private companies. Instead, the Cato 2018 Paid Leave Survey focuses on what people think about establishing a government-provided paid family leave program at the federal level.
The Gender Gap
Men and women feel differently about raising taxes for a federal paid family leave program. At first both men (66%) and women (81%) support a federal paid family leave program when higher taxes are not mentioned. However, men turn against the proposal as soon as costs are considered. If the federal program cost them $200 a year in higher taxes, 49% would support it and 50% would oppose it. If the program cost them $450 a year in higher taxes, 42% would support and 58% would oppose it, and if it cost $1,200 a year in higher taxes, 37% would support and 63% would oppose it. In contrast, majorities of women would support creating a federal paid leave program if it cost them $200 a year (58% support, 39% opposed) or $450 a year (55% support, 45% opposed) in higher taxes. However, a majority of women no longer would support it if it cost them $1,200 a year in higher taxes, with 48% in support and 51% opposed.
Partisan Consensus on Federal Paid Leave Breaks Down When Raising Taxes Considered
At first the federal paid leave proposal enjoys broad-based support among partisans. Majorities of Democrats (88%), independents (71%), and Republicans (60%) support a government program to provide 12 weeks of paid family leave. The Republican share is largely driven by Republican women with 72% who support the paid leave proposal, compared to 50% of Republican men—a 22-point difference.
However, consensus breaks down once taxes are mentioned. If the federal paid leave program costs workers $200 a year in higher taxes, Republicans turn against it with 63% opposed and 36% in favor. This includes majorities of both Republican women (52%) and Republican men (72%), although a wide gender gap remains. Independents are divided but lean in favor of the proposal even if their taxes were raised by $200 a year (50% in favor and 43% opposed). Democrats remain solidly in favor with 70% in favor and 30% opposed if the program cost them $200 a year.
If the price of the federal paid leave program reaches $450 per worker a year in higher payroll taxes, independents (56%) join Republicans (66%) in opposition to the program. Democratic support slips, but a majority (64%) remain in support. Even if taxes were raised $1,200 per person a year, a solid majority of Democrats (60%) would support creating a federal paid leave program, compared to 45% of independents and 22% of Republicans. In sum, Democrats have a much higher tolerance threshold for taxes than the average American.
What Trade-Offs Would Americans Make for Federal Paid Leave?
The previous section examined if Americans would be willing to pay higher taxes in exchange for a federal paid leave program. This next section investigates what Americans think about other trade-offs that academic research has found may result from implementing a federal paid leave program.
What if Payroll Tax Revenues Can't Cover the Cost?
The FAMILY Act would impose a new payroll tax on American workers to pay for the federal paid leave program. However, a report from the bipartisan AEI-Brookings Working Group on Paid Family Leave argues that the authors of the FAMILY Act underestimate the true cost of the program and that proposed tax revenues would likely "cover less than half of the costs of the paid leave benefits" depending on how many people use the program (p. 25). If payroll tax revenues fail to bring in enough money, government will have to cut spending elsewhere, raise payroll taxes, or borrow more money.
- 76% of Americans Oppose Cutting Spending to Pay for Federal Paid Leave: Americans would overwhelmingly oppose (76%) a new federal paid leave program if it required cutting spending on other programs like Social Security, Medicare, or education. A fifth (21%) would accept these cuts in exchange for a federal paid leave program.
- 57% of Americans Oppose Increasing the Deficit for Federal Paid Leave: Americans also oppose (57%) borrowing money to pay for a federal paid leave program. But relatively more people would be ready to increase the deficit (40%) to pay for paid leave than would be willing to cut Social Security or Medicare (21%).
- 52% of Americans Oppose Raising Their Taxes $450+ a Year for Federal Paid Leave: As mentioned earlier, a majority of Americans would oppose raising taxes above what the FAMILY Act authors propose to pay for the federal paid leave program. If implementing the federal program required that workers pay $450 or $1,200 a year in higher taxes, majorities of Americans would turn against the program (52% and 56% respectively).
What if a Government Paid Leave Program Hurt Women?
Research has found that government-provided paid leave programs may slow the pace of women's career trajectories. Studies have found that government-provided paid leave may lead to fewer women getting promoted and becoming managers because they take longer leaves than they otherwise would. Other studies have noted that employers, particularly smaller companies that have difficulty accommodating workers taking leave, may be less willing to hire female employees to begin with. Some argue that American women's corporate success is due to the fact that the United States does not provide generous family leave policies.
Consistent with these findings, American women are more likely to rise up the corporate ladder than their European counterparts who have access to generous family social welfare programs. An analysis of OECD countries reveals that American women are 3 to 14 times as likely as Scandinavian women to be employed as managers with 14.6% of American women who are managers compared to 4.6% of Norwegian, 4.2% of Swedish, and 1% of Danish women. Americans women are also more likely than women in France (5.1%), the United Kingdom (7.8%), Germany (2.7%), and the Netherlands (3.6%) to hold managerial positions. The 20-First's 2018 Global Gender Balance Scorecard finds that 53% of American companies compared to 14% of European companies have three or more women on company executive committees—the individuals who report directly to the CEO.1
The survey finds that voters would not be willing to sacrifice the progress women have made in the workplace if that were the cost of implementing a federal paid leave program:
- 69% Oppose Federal Paid Leave if it Meant Women Wouldn't Get Promoted: Americans would oppose establishing a federal paid leave program (69%) if doing so meant that women would be less likely to get promoted or fewer women would become managers at their jobs. A little less than a third (29%) would be willing to make this trade-off.
What if Employers Cut Other Benefits Workers Receive?
If employers don't lower their employees' wages or offer them smaller pay raises in the future to offset the costs of a federal paid leave program, they might cut other benefits they provide instead:
- 68% of Americans Oppose Federal Paid Leave if Employers Reduce Other Benefits: If a federal paid leave program meant that employers would reduce other benefits to workers to offset the costs of the new program, such as offering fewer health care benefits or fewer vacation days, 68% would oppose establishing the federal paid leave program. A little less than a third (29%) would favor it.
- 60% Oppose Federal Paid Leave if They Get Smaller Pay Raises If employers cut back on pay raises to employees to offset the costs of a federal paid leave program, 60% would oppose creating the program and 38% would support it.
What About People Who Would Not Use the Federal Paid Leave Program?
The FAMILY Act proposal would require workers pay higher taxes toward the federal family leave program regardless if they use the program or not. For instance, families comprised of a single breadwinner and a stay-at-home parent would still have their taxes raised even though they didn't use the program.
- 62% of Americans Oppose Federal Paid Leave If Workers Who Don't Use It Still Must Pay For It: Americans would oppose (62%) establishing a federal paid family leave program if families who don't use the program would still be required to pay higher taxes to provide benefits to others. A little more than a third (36%) are comfortable with this kind of redistribution.
Democrats Respond Differently to Federal Paid Leave Trade-offs
Democrats, independents, and Republicans respond differently to the potential or likely trade-offs of instituting a federal paid leave program. Although Republicans turn against federal paid leave quickly upon the mention of costs and trade-offs, Democrats are more comfortable with tax increases, deficit spending, and income redistribution.
As mentioned earlier, Democrats are less sensitive to tax increases. They are also comfortable with deficit spending, with 59% who would support federal paid leave even if the national deficit went up. In contrast, majorities of independents (55%) and Republicans (78%) would not accept more deficit spending to pay for a new federal paid leave program. A majority (53%) of Democrats are also willing to tax families who don't use the federal paid leave program to provide benefits to others who do use the program. Conversely, majorities of independents (64%) and Republicans (79%) would oppose federal paid leave if redistribution was required.
Democrats become more evenly divided, however, if federal paid leave hampered their future income mobility. Half would support (49%) and half would oppose (49%) a federal paid leave program if it meant they'd get smaller pay raises in the future. Fifty-six percent (56%) of independents and 76% of Republicans would oppose a federal paid leave program if they would receive smaller pay raises as a result.
There are some important trade-offs that Democrats would not tolerate in exchange for establishing a federal paid leave program:
- Spending Cuts: Democrats solidly turn against a federal paid leave program, with 74% opposed, if it required spending cuts to other programs like Social Security, Medicare, or education. Republicans (83%) and independents (67%) would also oppose federal paid leave if this were required.
- Constraining Women's Career Advancement: If establishing a federal paid leave program meant fewer women would become managers and get promoted, 63% of Democrats would oppose the program, as would 68% of independents and 77% of Republicans.
- Reducing Employer-Provided Benefits: Nearly two-thirds (63%) of Democrats would also oppose implementing the federal paid leave program if doing so caused employers to scale back benefits they provide to workers, such as offering fewer health care benefits or vacation days. Similarly, 65% of independents and 77% of Republicans would also oppose.
Americans Are Cautious of 6-Month Federal Paid Leave Program
Americans are more cautious of establishing a 6-month federal paid leave program. Even before considering costs, 48% of Americans support and 50% oppose creating a 6-month federal paid leave program. Support drops to about a third if a 6-month program cost workers $525 a year in higher taxes (66% oppose, 32% in favor), $750 a year in higher taxes (68% oppose, 31% in favor), or $2,100 a year in higher taxes (69% opposed, 28% in favor).
Men and women are divided about a 6-month program. A majority of women (54%) would favor it while a majority of men (58%) would oppose it. Also, majorities of Democrats (61%) and independents (52%) at first would favor a 6-month federal paid leave program, compared to 29% of Republicans. Instead, 70% of Republicans would oppose establishing a 6-month federal paid leave program.
However, once taxes are mentioned, all partisans and genders turn against a 6-month federal paid leave program: 55% of Democrats, 59% of independents, 85% of Republicans, 67% of men, and 64% of women would oppose the program if they had to pay $525 a year in higher taxes.
Experience in Europe demonstrates that once a government-supported paid leave program is established, even if limited in scope, it will very quickly increase in size and scope. For instance, Sweden offered 26 weeks of paid leave in 1970 and increased that to 56 weeks by 2016. Sweden is not unique. In fact, since 1970, OECD countries' government-supported paid leave programs have grown from an average of 17.2 weeks to 52.3 weeks in 2016.
These survey results indicate that if Congress were to enact a limited federal paid leave entitlement program, Americans would not accept its propensity to grow in size and cost.
New Parents: Childcare Affordability and Flexible Work Arrangements More Important Than More Paid Leave
Many proponents of a federal paid leave policy believe that it should be considered a top priority to help keep mothers in the labor force and to help parents balance work and family. The survey investigated how parents and in particular new mothers prioritize a variety of different issues affecting their ability to balance responsibilities at home and work.
New mothers say that more affordable daycare (24%), more flexible work schedules (22%), and the ability to work remotely (17%) are more important than more paid parental leave (12%) to help them balance work and family. Many probably feel that while the benefits of extending paid leave may last for a few months, reducing childcare costs and liberalizing labor markets could offer years of relief to parents and families. Another fifth of new mothers also reported that the ability to work part-time hours (10%) and have extended afterhours childcare (10%) would best help them balance work and family obligations.
Parents with children under 18 have somewhat different priorities. For these parents, their top priority is more flexible work schedules (26%), the ability to work remotely (23%), and more affordable childcare (20%). More paid parental leave comes in 4th with 10% who say that would best help them balance work and family. Others say that the ability to work part-time hours (9%) or have extended afterhours childcare (7%) is their priority.
Democrats, Republicans, and independents are remarkably similar when it comes to what their priorities are for balancing work and family. Only 8% of Democrats say that more paid parental leave would be the best way to help them balance work and family. Similarly, 7% of independents and 5% of Republicans say the same. All three groups instead say that more flexible work schedules, the ability to work remotely, and work part-time hours are more important to them than more paid parental leave. These data suggest that partisans don't necessarily have different needs as much as they think differently about how to help other people with their needs for balancing work and family.
Americans Support Parental Leave Savings Accounts
More than three-fourths (78%) of Americans support cultivating a culture of saving for parental and family leave through establishing a new tax-advantaged saving account for this purpose. Twenty percent (20%) would oppose tax-advantaged family leave savings accounts.
Establishing family leave savings accounts enjoys rare bipartisan support with 82% of Democrats, 80% of Republicans and 69% of independents in support of offering tax advantages to people who set aside money for parental, family, or medical leave. Similarly, strong majorities of women (80%) and men (76%) support establishing family leave savings accounts.
Estimating Costs of a Federal Paid Leave Program
The survey also measured how many Americans might use a federal paid leave program and how many weeks they might use, if it were available to them. The survey found that 24.8% of current workers said they wanted or needed to take leave in the past 1 year, after the birth or adoption of a child, to care for an ill family member, or to deal with their own serious medical condition. This stands in contrast to the 13% of all workers who take unpaid or paid leave in a given year, under our current regime in which there is no federal paid leave program offered.2
If Americans who wanted to take leave in the past year were offered 66% of their current pay, but not more than $1000 per week, they say they would have taken the following number of weeks of leave:
- Those taking parental leave would have used an average of 9 (median) or 13 (mean) weeks.
- Those taking leave to care for a family member with a serious medical condition would have used an average of 9 (median) or 12 (mean) weeks.
- Those taking leave to deal with their own serious medical condition would have used an average of 9 (median) or 14 (mean) weeks of leave.
In contrast, Americans taking unpaid leave under the Family and Medical Leave Act of 1993 (FMLA), take about 5 weeks of leave on average, according to a Department of Labor report. These data suggest that considerably more people would take considerably longer leaves from work if a federal paid leave program were available to them.
Of course, what people say and what people actually do are different things. Furthermore, even if a federal paid leave program were available to them, people wanting to take leave may not be able to afford lower wages. Or people who wish to take leave may worry that doing so would disrupt their career trajectory.
Nevertheless, the data collected in this survey indicate that a considerable share of Americans would want to take a considerable amount of leave in a given year. These survey results can help improve policy analysts' cost estimates of a federal paid leave program.
Public support for creating a significant new entitlement program depends on what it costs taxpayers. Thus, lawmakers have a democratic responsibility to better understand how many people would use the program in a given year—and thus how much it would cost—before they can know whether the public would support establishing the program.
Implications and Discussion
These data show that while people overwhelmingly support the general idea of more paid leave, they aren't willing to accept most of the costs and trade-offs necessary with establishing a new federal government program for this purpose.
Overall, Americans become most opposed to creating a federal paid family leave entitlement program if it required spending cuts (76%), hardened the glass ceiling for women (69%), or caused employers to cut other benefits (68%). Raising taxes on families who don't use the program (62%), reducing workers' pay raises in the future (60%), and increasing the deficit (57%) also sour people against the paid leave proposal.
Americans would be willing to shoulder an extra $200 a year in higher taxes in exchange for a federal program that would provide paid parental, family, and personal medical leave. However, if the costs of such a program were actually closer to $450 a year in higher taxes or more, support slips and a majority opposes establishing the program. If analysts who project higher costs of federal paid leave are correct, this would undermine support for the program.
One way to keep costs low is to only provide benefits to low-income workers in great need of help—or means-testing the program. However, these data also demonstrate that Americans may be reluctant to have their taxes raised to pay for a program they may not use.
These issues may make instituting a paid leave program difficult, unless proponents of the program are able to conceal the program's true costs. Concealing information from voters, however, would violate the norms of democratic accountability.
The Cato Institute 2018 Paid Leave survey was designed and conducted by the Cato Institute in collaboration with YouGov. YouGov collected responses online October 1-4, 2018 from a national sample of 1,700 Americans 18 years of age and older. Restrictions are put in place to ensure that only the people selected and contacted by YouGov are allowed to participate. The margin of error for the survey is +/- 2.4 percentage points at the 95% level of confidence.
The cost estimates used in the Cato 2018 Paid Leave Survey are based on the most high-profile paid family leave legislation proposed to date: The Family and Medical Insurance Leave (FAMILY) Act. This legislation, sponsored by Sen. Kirsten Gillibrand (D-NY) and Rep. Rosa DeLauro (D-CT) along with 34 co-sponsors as of this writing, formed the basis for Sen. Bernie Sander's (D-VT) presidential campaign plan to establish a federal paid family leave entitlement program.
The FAMILY Act would provide workers with up to 66% of their regular wages, capped at $1,000 per week, for 12 weeks, following the birth or adoption of a child, to deal with their own serious medical condition or to take care of a family member's medical issue. People would be able to collect benefits regardless of gender, of how long they've been at their specific job, of their status as a part-time, contractor, or full-time worker. They would also have access to anti-retaliation rules that provide some job protections.
The act would be funded through imposing a new payroll tax on workers. Advocates of the FAMILY Act say that the payroll tax contributions would be split between employers and employees. However, cost estimates in this report assume what is already generally agreed upon by economists: that workers bear virtually the entire cost of government-mandated benefits and employment-related taxes on employers in the form of lower wages (Summer 1989; Gruber and Krueger 1991; Gruber 1994; Cowan and Schwab 2011).3 Also see this Brookings brief about who bears the cost of government-supported paid leave.
How much taxes would ultimately rise remains unknown because the true costs of the program are unknown, and that's because we don't know exactly 1) how many people would use the program in a given year or 2) how many weeks people would use.
For instance, surveys have shown that about 16% of eligible workers have taken unpaid leave for an average of about 5 weeks under the federal Family Medical Leave Act of 1993 (FMLA) which provides 12 weeks of job protection for qualified medical and family reasons (see p. 84). Other surveys have found that usage of state-based paid leave programs vary widely from about 4% in New Jersey to 8.5% in Rhode Island where people took about 8 weeks of leave (see AEI-Brookings report p. 86). However, these state level programs have different eligibility requirements, pay people different amounts, and offer different levels of job protection. Thus, it becomes difficult to know how many people might use a more generous and paid federal paid leave program that is available to more people. And it's hard to know how long people would use it.
Because the costs of the federal paid leave program are unknown, we ask Americans about a low, middle, and high range per person cost estimate of the paid leave program. The three cost estimates vary assumptions about how many people would use federal benefits in a given year and how many weeks they would take. The low-range estimate assumes that about 6% of workers would take benefits in a given year and use 7 out of the 12 weeks offered. And the mid-range estimate assumes that 16% of workers would use 7 weeks out of the 12 weeks offered. And the high-range estimate assume that 16% of workers take benefits and use 12 out of the 12 weeks offered.
Here are the details for how we came up with low-, mid-, and high-range cost estimates of the federal paid leave program for the average worker, based upon the following assumptions:
- Low-Range Estimate:
The low-end estimate of a $200 per worker per year tax increase, comes from those who support creating the federal paid leave program. The authors of the FAMILY Act say a payroll tax of 0.40% could cover the cost of the program. This would amount to about $200 per year for the average worker (see Bureau of Labor Statistics for average wages).4 This payroll tax estimate can also be derived from the AEI-Brookings cost calculator using the following assumptions: a 12-week benefit, 70% wage replacement (with a cap of $1000 per week), no waiting period, no work requirement, and take up and usage rates based on State Program Experience. This last assumption uses the experience from state-level paid family leave programs, although these are less generous, offer less job protection, and have more eligibility requirements than the federal proposal. (See p. 25 of the AEI-Brookings report, and the Institute for Women's Policy Research report, or the National Partnership for Women & Families for further details on the low-range estimate.)
This estimate assumes about 6% of workers would use the federal paid leave program in a given year and use an average of 7 weeks out of 12 weeks offered.
- Mid-Range Estimate
The mid-range estimate of $450 per person tax increase is based on a critique of the low-end estimate from the bipartisan AEI-Brookings Paid Leave Working Group report. They explain that the true cost of the FAMILY Act federal paid leave program is likely far more expensive than the low-end estimate suggests.
Even when assuming a low estimate for the entire cost of the federal paid leave program, "a 0.4 percent payroll tax increase covers less than half of the costs of the paid leave benefits, depending on the program's take-up," they write [emphasis added] (p. 25). This would mean that FAMILY Act advocates may be pushing for a program that is actually far more expensive than they think it is. One reason for this, the AEI-Brookings report suggests, is that FAMILY Act advocates assume fewer people would use the federal program than may be realistic. FAMILY Act authors believe that a federal program would operate like California's paid leave program. However, AEI-Brookings writes "the FAMILY Act is more generous than the California program in terms of eligibility, job protection, and wage-replacement rate. Therefore, take-up rates and the average duration of leave would likely be higher under the FAMILY Act than they are in California under its existing law" [emphasis added] (p. 25).
For these reasons, we change only one thing for the mid-range estimate. We increase how many Americans we expect to use the program, and how many weeks they'd use, from what the low-range estimate assumes to how many people used the federal Family and Medical Leave Act (FMLA) in 2012, which offers job-protected, but unpaid leave, to workers. (One could argue that this still underestimates the true cost of the FAMILY act because we'd expect more people to take more paid leave than they would unpaid leave.) We update the AEI-Brookings cost calculator using take-up and duration use rates from the second AEI-Brookings Working Group on Paid Family Leave report, see page 84.
This increases the expected payroll rate from 0.40% to 0.89%. For the average worker, that amounts to about $450 per year. This estimate assumes 16% of people would use the federal paid leave program in a given year and use an average of 7 weeks out of the 12 weeks offered.
- High-Range Estimate
The high-range estimate of $1,200 considers that more people may take more leave if they have access to paid family and medical leave than if they only had unpaid leave.
For the high-range estimate we increase the number of weeks Americans may take to the full 12 weeks offered by the program. This would require a payroll tax rate of 2.1%, according to Ben Gitis' calculations at the American Action Forum and member of the AEI-Brookings working group. This amounts to about $1,100 for an average worker. Taking into account the realistic possibility that not only would Americans take more weeks of leave but more people would take it in the first place, and that the program would likely expand over time, we round slightly upwards to $1,200 per person.
This estimate assumes 16% of people would use the federal paid leave program in a given year and would use 12 weeks of the 12 weeks offered.
For further information on the potential costs of a federal paid leave program, please see here.
1 The number for American companies is based on 37 out of 38 being companies based in the United States and 1 from Brazil.
2 Data on leave taking come from 2012 Department of Labor Report on leave taking, Abt Associates. 2012. “Family and Medical Leave in 2012: Technical Report.” Department of Labor, http://www.dol.gov/asp/evaluation/fmla/fmla2012.htm.
3 Please see Lawrence H. Summers, "Some Simple Economics of Mandated Benefits," The American Economic Review 79, no. 2 (1989): 177-83; Jonathan Gruber and Alan B. Krueger, "The Incidence of Mandated Employer-Provided Insurance: Lessons from Workers' Compensation Insurance," Tax Policy and the Economy, Volume 5, January 1, 1991, pp. 111-44; Jonathan Gruber, "The Incidence of Mandated Maternity Benefits," The American Economic Review 84, no. 3 (1994): 622-41; Jay Bhattacharya and M. Kate Bundorf, "The Incidence of the Healthcare Costs of Obesity," Working Paper (National Bureau of Economic Research, May 2005); Benjamin Cowan and Benjamin Schwab, "The Incidence of the Healthcare Costs of Smoking," Journal of Health Economics 30, no. 5 (September 2011): 1094-1102.
4 This is based on the average (mean) worker across all occupations earning $50,620 per year, Bureau of Labor Statistics, May 2017. National Occupational Employment and Wage Estimates United States, Occupational Employment Statistics, https://www.bls.gov/oes/current/oes_nat.htm#00-0000.