The Build Back Better Act would establish a program whereby the federal government would provide paid family and medical leave for eligible workers. That program would affect workers, employers, and states.
H.R. 5376, the Build Back Better Act, as passed by the House of Representatives, would establish a program whereby the federal government would provide paid family and medical leave for eligible workers. That program would cost about $200 billion from 2022 to 2031, the Congressional Budget Office estimates.
In addition to the effect on the federal budget, that program would affect workers, employers, and states. This document describes the key channels in the labor market through which those changes could affect the economy—answering some questions asked by Members of Congress. Understanding those channels would be important for identifying any potential effects on CBO’s economic forecast if such a program was established. The document also describes channels through which such paid leave could continue to affect the labor market in the longer run.
If workers had access to federally provided paid leave, they would take more paid leave. Some workers would earn more and some would earn less, depending on whether their employers currently offer leave and whether they currently take any leave. CBO expects that most employers who currently offer paid family and medical leave would ultimately provide fewer weeks of leave and less pay during leave.
This document does not examine economic effects that would arise from how the program was financed.