Nicolas Ziebarth, Cornell University

Mandated Sick Pay: Coverage, Utilization, and Substitution Effects
Friday, 22 March 2019 - 11:30 am to 1:00 pm
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Contact person: 
Myra Yazbeck
Email: 
myazbeck@uOttawa.ca
Phone: 
613-562-5800
Extension: 
1156
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Registration required: 
No
Cost to attend: 
Free of charge
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This paper evaluates the effect of employer sick pay mandates on sick pay coverage, utilization, and labor costs in the United States. By estimating the effect on non-mandated fringe benefits such as paid vacation days, it also evaluates the potential for unintended substitution effects. We use the National Compensation Survey along with difference-in-differences models in an event study design to estimate the causal effects of mandates in four states and eight cities. Within the first two years, the likelihood of having sick pay coverage increases significantly by 9 percentage points from a baseline level of 64 percent; coverage remains stable at this level for at least four more years. We find that newly covered employees take about two additional sick days in the first quarter of the year. These additional sick days increase labor costs by 23 cents per hour worked for marginal firms. However, we find little evidence that mandated sick pay crowds-out other non-mandated paid leave benefits.