Build Back Better Act: Paid Leave for New Parents in Paid Parental Leave

A national paid leave program aimed exclusively at new parents would put the U.S. on par with the rest of the developed world, provide significant economic, social, and health benefits, establish a high-quality program within budgetary realities, and garner greater long-term bipartisan support.

  • Currently, only 23% of private sector workers in the U.S. have access to paid parental leave, but a robust body of evidence tells us that paid parental leave—time to bond with a newborn, newly adopted, or newly fostered child—helps workers stay in their jobs. It also provides significant benefits for infant and childhood health and a wide variety of other economic and social indicators for families.
  • Republican and Democratic Presidents have supported creating a national paid parentalleave program, and the policy enjoys overwhelming support among the public.
  • Launching a national, high-quality parental leave program would be substantially easier than setting up comprehensive PFML, in part due to the federal government’s experience in providing paid parental leave to federal employees under FEPLA.
  • Given current budgetary considerations, a program that provides only paid parental leave would allow lawmakers to implement a benefit structure that is more generous and longer-lasting than the 2- or 4-week program currently under consideration.
Estimated One-Year Cost of Paid Parental Leave[1] 70% Wage Replacement
Maximum Leave DurationMax Weekly Benefit of $800Eligibility Cap of $78,000 Personal Annual Earnings
6 weeks$8.5B-10.8B$5.5B-7.0B
8 weeks$10.5B-13.3B$6.8B-8.6B
12 weeks$12.8B-16.9B$8.3B-10.9B
  • Another option is to base eligibility on the federal poverty level (FPL). A 12-week parental leave benefit that is limited to households earning under 325% of the FPL ($76,700 in household income[2] for a family of three) would cost an estimated $4.3B per year. Setting the cap at 450% of the FPL ($98,600 for a family of three) for a 12-week parental leave benefit would cost an estimated $5.8B per year.[3]

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[1] Calculated using AEI’s Paid Family and Medical Leave Cost Model assuming the inclusion of a one-week waiting period for benefits to begin after a claim. Initial administrative start-up costs not included.

[2] Note that FPL is based on household income, which differs from personal earnings. Household income measures the total earnings of everyone in a household. Personal earnings measure the wage earnings of an individual worker.

[3] Cost estimates based on a phase-in/phase-out proposal modeled on the EITC.