Evaluating Public Policy Impacts on Female Labor Participation: A Difference-in-Differences Framework with Dummy Variables

Abstract

Female labor-force participation is influenced by both economic conditions and family-related employment constraints, making paid family leave an important area of public policy evaluation. This study examines whether the implementation of California Paid Family Leave was associated with a distinct change in female labor-force participation relative to Arizona. Using publicly available annual state-level labor-market statistics derived from the Current Population Survey and published by the U.S. Bureau of Labor Statistics, the analysis covers the period from 2000 to 2008. A Difference-in-Differences framework is constructed with treatment, post-policy, and interaction dummy variables, while 2004 is treated as a transition year because the policy was implemented mid-year. The baseline estimate indicates a relative change of −0.825 percentage points in California, with a robust standard error of 0.486 and a p-value of 0.089. Controlling for the total unemployment rate produces a similar estimate of −0.849 percentage points. Robustness checks preserve the negative direction of the coefficient, although statistical significance varies with the treatment of 2004 and the estimation window. These findings do not provide strong evidence of an immediate increase in aggregate female labor-force participation following policy implementation. Ultimately, the results highlight the critical importance of distinguishing aggregate participation effects from broader labor-market attachment and employment-continuity outcomes, offering valuable insights for future policy design.