Legislative activity regarding parental and family medical leave has been intense, with heated debate, in both national and state political arenas. Proponents of legislation report that policy is needed because of women's increasing rate of labor force participation and the concomitant shortage of substitute infant care. Benefits of policy are presumed to include women's health and parent-child bonding. However, no direct empirical evidence exists to support these assumptions. Opponents of legislation say that the cost of policy is burdensome to employers. However, the General Accounting Office reports that the only measurable net costs to employers associated with the federal bill will be to cover the leave takers' health insurance premiums. This literature review examines the above issues and identifies a policy relevant research agenda, crucial to the development of rational and humane policy.