Review of Finance Vol. 30 No. 3 2026

Paid leave pays off: the effects of paid family leave on firm performance

Benjamin Bennett¹; Isil Erel²; L Stern³; Zexi Wang⁴

¹ Neeley School of Business, Texas Christian University , Fort Worth, TX 76109, · ² David A. Rismiller Chair in Finance, NBER, and ECGI, Fisher College of Business, The Ohio State University , Columbus, OH 43210, · ³ Foster School of Business, University of Washington , Seattle, WA 98195, · ⁴ Management School, Lancaster University , Lancaster, LA1 4YX,

Abstract

We study the effects of state-level Paid Family Leave (PFL) laws on US firms across a broad panel of private and public companies. Following PFL adoption, female employee turnover declines, labor productivity increases, and treated firms experience significant improvements in operating performance. These effects are stronger in regions with a larger supply of childbearing-age female labor, among R&D-intensive firms and firms with high intangible capital, consistent with a mechanism in which PFL reduces job separation expectations and encourages investment in firm-specific human capital. Our findings suggest that PFL can generate tangible firm-level benefits by enhancing workforce stability and productivity.

DOI

10.1093/rof/rfaf072

Volume

30

Issue

3

Pages

887-919

Language

en

Sources

openalex crossref

Cite

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