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

Johanna Catherine Maclean, Stefan Pichler and Nicolas R Ziebarth

Journal of the European Economic Association, 2025, vol. 23, issue 5, 1868-1907

Abstract: 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 to paid sick leave for U.S. workers. Increases in sick pay coverage reach 30 percentage points from a 63% baseline 5 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 upward trends in coverage and take-up. Five years post mandate, sick leave use has linearly increased to 2.4 days per year for marginal jobs. Finally, we find crowding-in of non-mandated benefits, which we label “job upscaling” by firms to differentiate jobs and attract labor.

Date: 2025
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