Does Paid Family Leave Reduce Nursing Home Use?

January 5, 2018

January 2018 marks the beginning of New York state’s new paid family leave policy, which now guarantees workers up to eight weeks of paid leave to care for children or other family members and will guarantee up to twelve weeks by 2021. New parents, adults with ill or elderly family members, and relatives of deployed military service personnel are all eligible to receive up to 50 percent of New York’s average weekly wage for each week of leave they take under the program. To date, New York’s paid family leave policy is the most comprehensive and inclusive of any state in the U.S.

A new study supported by the Russell Sage Foundation examines the effects of statewide paid leave policies on families’ use of nursing homes. In their report, published in the Journal of Policy Analysis and Management, authors Kanika Arora (University of Iowa) and Douglas A. Wolf (Syracuse University) examine California’s paid family leave program, which went into effect in 2004 and guarantees up to six weeks of paid leave for employees caring for family members. In looking at the period between 1999 and 2008, they find that this policy reduced nursing home use by about 0.65 percentage points. “While this reduction may appear small in size,” the authors note, “its relative magnitude is substantial when compared to baseline nursing home utilization levels. In 2003, the year prior to paid family leave (PFL) implementation, 5.7 percent of California’s older adults resided in nursing homes. Thus, our estimated PFL effect implies a relative decline of over 11 percent in the proportion of elderly in nursing homes in California.”

As RSF author Paul Osterman notes in his latest book, Who Will Care for Us?, the demand for elder care will rise significantly over the next two decades as the Baby Boom generation enters or nears retirement. Arora and Wolf’s study shows that paid family leave programs, while not explicitly intended to reduce nursing home usage, may nevertheless function as part of the answer to providing an aging population with long-term care.

Read the article in full from the Journal of Policy Analysis and Management.

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RSF: The Russell Sage Foundation Journal of the Social Sciences is a peer-reviewed, open-access journal of original empirical research articles by both established and emerging scholars.

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