Mandated Sick Pay: Coverage, Utilization, and Crowding-In

Using the National Compensation Survey from 2009 to 2022 and difference-in-differences methods, we find that state-level sick pay mandates are effective in broadening access for U.S. workers. Increases in coverage reach 30ppt from a 63% baseline five years post-mandate. Mandates have more bite in jobs with low pre-mandate coverage. Further, mandates reduce inequality in access to paid sick leave substantially, both across and within firms. Covid-19 reinforced existing positive trends in coverage and take-up. Sick leave use increases linearly, whereas costs plateau after five years. Finally, we find crowding-in of non-mandated benefits which we label ''job upscaling'' by firms to differentiate jobs and attract labor. (JEL: 12, I18, J22, J28, J32, J38, J88, H75)

Keywords: social insurance; sick pay mandates; take-up; sick leave use; fringe benefits; crowding-in; job upscaling; National Compensation Survey; covid-19.