Paid sick leave improves workers’ health and the economy

Beginning this year, Americans in three more states—Alaska, Missouri, and Nebraska—will have access to paid sick leave, bringing the total number of states that provide paid sick leave up to 18 (plus Washington D.C.). These policies provide workers short-term leave to care for themselves or their family when they become sick.

Paid sick leave laws have passed at state and local levels in record numbers over the last few years. These laws improve public health by reducing the spread of illness, and their costs to businesses are extremely modest—generally requiring no measurable change to business practices. Yet new evidence is building support for a benefit that workers have long known about, and employers are only recently getting hip to: Paid sick leave is a key work support that may increase employment and workforce attachment.

Paid sick leave and employment

Advocates have long suggested that lack of access to paid sick leave forces an impossible choice when workers (or family members of workers) become sick: (1) workers either stay home and lose pay or risk losing their job, or (2) workers go to work sick, putting off care and infecting their coworkers. Both choices can lead to the loss of employment or work hours. In the first scenario, as many as half of workers surveyed reported that concern over employer retaliation was one of the main reasons preventing them from taking sick leave, which suggests that those who do take sick leave risk job and workplace insecurity. In the second scenario, workers may not immediately risk their job, but they are less productive at work and are more likely to put off getting care. As their situation becomes worse, they may need to stay home for much longer or may lose their job (or quit) because of their poor health. Workers who show up to work sick with infectious diseases also risk infecting their colleagues, which leads to more people getting sick and losing work time.

By contrast, if a worker has access to job-protected paid sick leave, they can take the time they need to seek medical care or stay home without the fear of losing employment or earnings. Time off to care for an illness allows workers to recover and come back to work (rather than needing to take a longer leave down to road due to putting off care) and reduces the spread of disease in the workplace. Evidence shows that paid sick leave is associated with reductions in job separation rates among women, suggesting access to paid sick leave might improve workers’ employment prospects. Aggregate employment measures have also been used to examine whether increased labor costs stemming from mandatory paid sick leave policies have distressed employers enough to force them to downsize and found this wasn’t the case. But to date, very little research has shown a causal relationship between workforce attachment and government-mandated sick leave policies.

New evidence sheds light on paid sick leave impacts

Two new papers provide evidence on how paid sick leave mandates support work. The first, a paper in Journal of Policy Analysis and Management, investigates how state paid sick leave policies impact women’s employment and earnings. Arguing that women are more likely to be employed in jobs without access to paid sick leave and more likely to consider caregiving responsibilities in their employment, the paper shows that women’s employment and earnings increased in response to state-level paid sick leave laws. Figure A, which reproduces the results of the paper, shows that paid sick leave laws increased women’s employment by 1.2%—the largest increases were for women without college degrees and those with child care responsibilities.

Figure A

Women with child care responsibilities and with lower educational attainment benefit most from paid sick leave: Average post-policy impact of paid sick leave mandates on employment in the last year by subgroup

Notes: Each co-efficient is the post-policy difference-in-differences effect with multiple periods estimators (Callaway & Sant'anna, 2021) from a separate regression estimating the effects of state-level paid sick leave policies by year and subgroup. Models control for age, race and ethnicity, nativity, educational attainment, birth in past year, number of children under age 18, and number of children under 5 and are weighted by inverse probability of treatment weights. Standard errors are clustered at the state level. 

Source: American Community Survey, 2010 to 2019. 

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The second, a recent Upjohn Institute working paper we wrote together, explored the impact of one of the longest local paid sick leave policies—Seattle’s Paid Sick and Safe Time Ordinance—on employment and hours worked by workers in low wage jobs. We highlight workers in low-wage jobs because they often only have access to paid sick leave when it is required by public policy. We find that the policy did not change workers’ likelihood of being employed. Yet, even as employment held steady, we find that workers increased their hours worked on the job by 4.4 hours per quarter, or about 20 hours a year.

Our results underscore that paid sick leave policies allow workers to not only maintain their employment but also add work hours, suggesting that such policies function as work support for workers earning low wages. Given that low-wage workers are more likely to work fewer hours than full-time workers (and likely to want more hours), the results also show that paid sick leave may also help workers make ends meet.

Taken together, this new evidence demonstrates that paid sick leave mandates serve an important role in supporting workforce attachment, particularly among workers whose employers are less likely to voluntarily provide this benefit. The health benefits of paid sick leave policy led to the passage of the Families First Coronavirus Relief Act in 2021. Our new evidence that paid sick leave policies impact on hours worked may have implications for workers seeking to reach eligibility thresholds for other workplace policies, such as paid family leave and employer-supported health insurance, that support worker productivity and well-being. Many members of Congress already see the value of paid sick leave: The HEALTHY Families Act has been introduced repeatedly since 2004. Now is the time to act to increase workers’ work intensity and firm productivity through a policy that makes all our communities healthier.