Mandated Sick Pay: Coverage, Utilization, and Welfare Effects

J. Catherine Maclean (), Stefan Pichler () and Nicolas Ziebarth ()
Additional contact information
J. Catherine Maclean: Temple University

No 13132, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper evaluates the labor market effects of sick pay mandates 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 13 percentage points from a baseline level of 66%. Newly covered employees take two additional sick days per year. We find little evidence that mandating sick pay crowds-out other non-mandated fringe benefits. We then develop a model of optimal sick pay provision along with a welfare analysis. For a range of plausible parameter values, mandating sick pay increases welfare.

Keywords: labor costs; unintended consequences; moral hazard; fringe benefits; employer mandates; medical leave; sick leave; sick pay mandates; National Compensation Survey (NCS); welfare effects; optimal social insurance; Baily-Chetty (search for similar items in EconPapers)
JEL-codes: I12 I13 I18 J22 J28 J32 (search for similar items in EconPapers)
Pages: 66 pages
Date: 2020-04
New Economics Papers: this item is included in nep-hea, nep-hrm, nep-ias and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
https://docs.iza.org/dp13132.pdf (application/pdf)

Related works:
Working Paper: Mandated sick pay: Coverage, utilization, and welfare effects (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp13132

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().