Does Paid Family Leave Promote Female Entrepreneurship? Evidence from State Policy Adoptions

Abstract

Do state paid family leave (PFL) programs increase female entrepreneurship by reducing "entrepreneurship lock"? I exploit the staggered adoption of PFL across seven U.S.\ jurisdictions (six states plus DC) between 2010 and 2022 to estimate causal effects on female self-employment rates using a difference-in-differences design. Applying the Callaway and Sant'Anna (2021) estimator with never-treated states as controls, I find a precisely estimated null effect: PFL adoption does not significantly change the female self-employment rate, with a point estimate of $-0.19$ percentage points (SE = 0.14). This null result is robust to alternative control groups, excluding California, separating incorporated and unincorporated self-employment, and a triple-difference specification comparing female to male self-employment. A placebo test on male self-employment shows no significant effect ($-0.28$ pp, SE = 0.21). These findings suggest that PFL, while potentially valuable for other labor market outcomes, does not unlock a measurable entrepreneurial margin for women—consistent with prior null results from California alone but now established with greater statistical power across multiple states.