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Mandated sick pay: Coverage, utilization, and welfare effects

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  • Maclean, Catherine
  • Pichler, Stefan
  • Ziebarth, Nicolas R.

Abstract

This paper evaluates how sick pay mandates operate at the job level in the United States. Using the National Compensation Survey and difference-in-differences models, we estimate their impact on coverage rates, sick leave use, labor costs, and non-mandated fringe benefits. Sick pay mandates increase coverage significantly by 18 percentage points from a baseline level of 66% in the first two years. Newly covered employees take two additional sick days per year. We find little evidence that mandating sick pay crowds-out non-mandated fringe benefits. Finally, we develop a model of optimal sick pay provision and illustrate the trade-offs when assessing welfare.

Suggested Citation

  • Maclean, Catherine & Pichler, Stefan & Ziebarth, Nicolas R., 2021. "Mandated sick pay: Coverage, utilization, and welfare effects," ZEW Discussion Papers 21-083, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:21083
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    Cited by:

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    2. Anand, Priyanka & Dague, Laura & Wagner, Kathryn L., 2022. "The role of paid family leave in labor supply responses to a spouse's disability or health shock," Journal of Health Economics, Elsevier, vol. 83(C).
    3. Melanie Arntz & Sebastian Findeisen & Stephan Maurer & Oliver Schlenker, 2024. "Are we yet sick of new technologies? The unequal health effects of digitalization," CEP Discussion Papers dp1984, Centre for Economic Performance, LSE.
    4. Timpe, Brenden, 2024. "The labor market impacts of America’s first paid maternity leave policy," Journal of Public Economics, Elsevier, vol. 231(C).
    5. Rahi Abouk & John S. Earle & Johanna Catherine Maclean & Sungbin Park, 2024. "Promoting Public Health with Blunt Instruments: Evidence from Vaccine Mandates," NBER Working Papers 32286, National Bureau of Economic Research, Inc.
    6. Michelle M. Miller, 2022. "The impact of paid sick leave laws on consumer and business bankruptcies," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 19(4), pages 844-896, December.
    7. Martin Andersen & Johanna Catherine Maclean & Michael F. Pesko & Kosali I. Simon, 2020. "Paid sick-leave and physical mobility: Evidence from the United States during a pandemic," NBER Working Papers 27138, National Bureau of Economic Research, Inc.
    8. Stefan Pichler & Katherine Wen & Nicolas R. Ziebarth, 2021. "Positive Health Externalities of Mandating Paid Sick Leave," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 40(3), pages 715-743, June.
    9. Martin Andersen & Johanna Catherine Maclean & Michael F. Pesko & Kosali Simon, 2023. "Does paid sick leave encourage staying at home? Evidence from the United States during a pandemic," Health Economics, John Wiley & Sons, Ltd., vol. 32(6), pages 1256-1283, June.
    10. Johanna Catherine Maclean & Ioana Popovici & Christopher J. Ruhm, 2023. "Does Paid Sick Leave Facilitate Reproductive Choice?," NBER Working Papers 31801, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    sick pay mandates; take-up; social insurance; fringe benefits; moral hazard; unintended consequences; medical leave; National Compensation Survey; optimal social insurance; Baily-Chetty; welfare;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare

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