The Benefits and Costs of Paid Parental Leave in the United States

To inform US policy debates about the introduction of a national paid leave program, we conduct a benefit-cost analysis of its introduction. We identify high-quality, quasi-experimental studies on the impact of paid parental leave on infants and parents. Using both the most conservative estimates and the mean estimates from this review, we estimate that every $1,000 investment in paid parental leave would generate, respectively, $7,251 and $29,369 in net social benefits. We use these estimates to conduct a microsimulation of the benefits and costs of two national paid parental leave policy proposals with variations in eligibility and wage replacement rates. The proposed national 4-week program’s initial fiscal cost would be under $2 billion and generate long-term net social benefits with a present discounted value of either $13 billion or $55 billion. The initial fiscal costs and long-term net social benefits of the 12-week program would be about 3.7 times larger.