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Giving Compass' Take:
• At Equitable Growth, Hilary Wething provides a focused analysis of how paid sick leave policy across the U.S. affect job turnover.
• Why is it important to study the importance of paid sick leave policy on U.S. jobs, especially as we continue to grapple with the effects of COVID-19 on unemployment?
• Look into how the global pandemic has disproportionately affected women workers.
I examine the impact of Seattle’s 2011 paid sick leave law on job turnover using administrative employer-employee matched data. I find that the policy reduced job turnover for low-wage jobs in small firms but did not affect employment levels or the duration of nonemployment. The declines in job turnover were driven by short-term jobs, specifically, 41 percent of the decline occurred through quits, 39 percent through layoffs, and 20 percent through reductions in labor force exits. The results are consistent with the theory that increased compensation will extend employer-employee matches, but only among jobs with high levels of instability.
More than 30 cities and 14 states across the U.S. have adopted paid sick leave laws, which allow workers to take paid time off work when they, or a family member, are sick. These laws are intended to improve public health and increase economic security. Workers without access to paid sick leave are more likely to work while sick, which can increase the spread of diseases in the workplace and lead to declines in productivity, poor health outcomes, job loss, or economic hardship. Lack of access to paid sick leave is found predominantly in low-wage work, jobs which are defined by high turnover rates and limited job security. In reducing contagion and improving worker’s health and productivity, paid sick leave policies have the potential to reduce job flows and stabilize employment in the low-wage labor market.
While there has been considerable research on how paid sick leave policies have shaped employment, the effects of paid sick leave policies on job turnover is an understudied area of research. For workers, employment instability has been linked to economic insecurity, income volatility, psychological distress, and for workers with children, adverse educational outcomes for school-aged children.
Read the full report on paid sick leave policy by Hilary Wething at Equitable Growth.
Improvements in work conditions from a paid sick leave policy may reduce separations and job turnover of all types. Quits may decrease because workers value their job more with the new benefit. Layoffs may also decrease as employers lose their ability to retaliate against workers who missed work because they were sick or had to care for a family member.