Mandated Sick Pay: Coverage, Utilization, and Welfare Effects

This paper evaluates the labor market effects of sick pay mandates in United States. Using National Compensation Survey and difference-in-differences models, we estimate their impact on coverage rates, leave use, costs, non-mandated fringe benefits. Sick increase significantly by 13 percentage points from a baseline level 66%. Newly covered employees take two additional days per year. We find little evidence that mandating crowds-out other then develop model optimal provision along with welfare analysis. Mandating likely increases welfare.