ESTIMATED FISCAL AND HUMAN SERVICES BENEFITS OUTWEIGH COSTS BY AS MUCH AS 18:1
Press Contact: Molly Kramer, 615-343-8948, molly.m.kramer@vanderbilt.edu
Today, we released Benefit-Cost Analysis of H.B.181, a Pennsylvania bill to create a new paid family and medical leave (PFML) program. The new analysis uses the most rigorous research on PFML outcomes to estimate the bipartisan bill’s potential impact on beneficiaries, employers, and the commonwealth government.
Key findings:
- Enacting H.B. 181 would be budget neutral.
- Each year, bonding leave would result in a net benefit of $379 million to families, employers, and the PA government, outweighing costs by 18 to 1.
- Employees would receive double—or more—return on their investment by contributing to the PFML program.
- Adopting H.B. 181 would improve PA’s ranking in our Policy Impact Calculator. The state would rise from 49th to 37th by increasing the minimum resources available to working families.
“Paid family and medical leave is one of the most cost-effective policies for states to help ensure that all children thrive,” said Dr. Cynthia Osborne, Executive Director of the Prenatal-to-3 Policy Impact Center and Professor of Early Childhood Education and Policy at Vanderbilt University. “Rigorous research shows that paid leave allows working families to get timely preventive health care for babies and keeps parents in the workforce, among many other benefits.”
In 2023, Pennsylvania lawmakers introduced H.B. 181 to establish a new PFML program, offering up to 20 weeks of paid bonding leave after the birth of a new child. The bill is sponsored by a bipartisan group of 54 lawmakers in the House. A similar bipartisan bill will also soon be introduced in the Pennsylvania Senate. Children First of Pennsylvania requested that we analyze the bill’s impacts.
“The research is clear. A statewide paid leave program would be a gamechanger for Pennsylvania’s working families,” said Donna Cooper, Executive Director of Children First. “No family should have to choose between financial stability and bonding with their newborn at the most critical time. The benefits of a statewide paid leave program in Pennsylvania would immensely impact early childhood development, the fiscal stability of parents and our Commonwealth’s economy.”
Our analysis suggests that implementing paid bonding leave would generate significant returns. Families with infants would experience reduced healthcare and child care expenses, enhanced employment and household income, and direct benefit payments from the bonding leave program. Pennsylvania would see advantages such as heightened sales and income tax revenue, reduced expenditure on state-sponsored health care and non-parental infant care, among other benefits.
