How Much Would Senator Rubio’s Paid Leave Program Help New Parents?

Unlike every other high-income nation, the United States does not guarantee paid leave to new mothers (Addati, Cassirer, and Gilchrist 2014). To expand paid leave options, Senator Marco Rubio (R–FL) introduced legislation this month that would allow new parents to use part of their future Social Security retirement benefits to finance time off from work to care for a newborn or newly adopted child. Rubio’s bill, the Economic Security for New Parents Act (S. 3345), would offset parental leave payments by raising the Social Security retirement age for paid leave recipients, permanently reducing their future Social Security retirement benefits. Transfers from the US Treasury to the Social Security trust funds would cover any short-term annual deficits in the leave program’s early years, before participants who receive leave payments begin collecting reduced retirement benefits.

This brief analyzes the potential impact of Rubio’s paid parental leave proposal. Using the Dynamic Simulation of Income Model (DYNASIM), the Urban Institute’s dynamic microsimulation tool, we simulate program participation, leave payments, future Social Security retirement benefits, and the cost of the program to the US Treasury. Rubio’s proposal resembles a paid parental leave plan developed earlier this year by the Independent Women’s forum (Shapiro 2018), which we examined in a previous report (Favreault and Johnson 2018), but the senator’s plan has more details and some changes

– Urban Institute

Read the full journal article here.