Employers might be overestimating the downsides of offering paid parental leave and underestimating the costs of losing employees by foregoing it, argues economist Emily Oster in a new report based on research she conducted with the advocacy group Healthy Moms, Healthy Babies America.
A survey of employers in four states without public-sponsored leave programs — Arkansas, Illinois, Mississippi, and Nebraska — found that 55% of employers reported no additional costs from offering it. In 77% of cases, employers said existing staff absorbed the work of the new parent.
Overall, respondents with experience offering parental leave were twice as likely to say the benefits outweighed costs (47% vs. 23%). Some employers cited worker retention as a reason they offered it. “This data suggests it is far more manageable for employers than many people fear,” said Oster, also the CEO of ParentData, a data-driven parenting and pregnancy advice platform.
Still, 17% of employers who offered leave said it created “significant financial strain.” The study did not specify the length of the paid leave or examine if there were adverse retention effects on other employees within the company.
Oster suggested states should consider tax credits to entice employers to offer parental leave, and should try to increase public awareness of her survey’s results, especially among small businesses.
Healthy Moms, Healthy Babies’ push for paid leave research comes as part of a campaign to spend $100 million over five years to advance research and policies to push down the US maternal mortality rate by half, according to Robin Reck, the group’s executive director.