Welcoming a new child can lead to economic instability. Around the time a child is born, parents’ work arrangements often change. Parents may take paid or unpaid leave, work fewer hours, voluntarily leave a job, or even be fired. For many households, this means income declines at precisely the time they need increased resources for their new child’s needs.

This study of parents in Washington State finds that certain groups of parents are disproportionately likely to reduce employment around the time of a birth, generating inequalities based on sex, race, and socioeconomic status. This points to the potential for Washington’s Paid Family and Medical Leave (PFML) started in 2020 to reduce income and employment disparities among new parents. However, inequalities in eligibility for the program may hamper the policy’s ability to close these gaps.