The Economic Effects of Investing in Quality Care Jobs and Paid Family and Medical Leave

Job Creation through Public Investments in Families

This study by PERI researchers Lenore Palladino and Chirag Lala examines the effects of public investments in childcare, home health care, and paid family and medical leave for the U.S. workforce, as proposed by the Biden Administration’s American Jobs Plan and American Family Plan. The authors find that investing in the childcare and home health care workforce, both by ensuring that the current workforce earns a minimum of $15/ hour and by expanding the workforce to meet current demand, will generate about 1.1 million new jobs overall. This is in addition to the benefits for families through these measures.

Abstract

This Research Brief examines the effects of critical public investments in childcare, home health care, and paid family and medical leave for the U.S. workforce, as proposed by the American Jobs Plan and the American Family Plan. We find that investing in the childcare and home health care workforce, both by ensuring that the current workforce earns a minimum of $15/ hour and by expanding the workforce to meet current demand, has positive macroeconomic effects as the care workforce spends its own money on goods and services throughout the rest of the economy. We also find that paid family and medical leave—a crucial necessity for workers facing their own or their family’s health issues—positively boosts the economy, as workers spend the wage replacement income that they earn. 

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