Labor Market Effects of Paid Sick Leave: The Case of Seattle

Authors

Hilary Wething, Economic Policy InstituteFollow
Meredith Slopen, City University of New YorkFollow

Series

Upjohn Institute working paper ; 24-396

DOI

10.17848/wp24-396

Issue Date

January 2024

Abstract

We investigate the impact of Seattle’s Paid Sick and Safety Time (PSST) policy on workers’ quarterly hours worked and separation hazard. Using Unemployment Insurance records from before and after the implementation of PSST, we examine individual-level employment behavior at the extensive and intensive margins and compare Seattle workers to workers in Washington state using a difference-in-differences strategy. Importantly, we consider how impacts vary by employment characteristics, including worker wage rate and tenure, and by firm characteristics, including industry and firm size. We find that PSST increased workers’ quarterly hours by 4.42 hours per quarter, or around 18 hours per year. While there was no overall impact on workers’ separation hazard rates, we observed a 10 percent decrease in separations for workers in firms with more than 50 employees following PSST implementation. Our findings indicate that paid sick leave policies may support workers in increasing their hours and, to a lesser extent, may reduce turnover.

Sponsorship

W.E. Upjohn Institute for Employment Research Early Career Research Award No. 22-58161-17

Subject Areas

LABOR MARKET ISSUES; Job security and unemployment dynamics; Turnover; Wages, health insurance and other benefits; Health insurance; Nonwage benefits; Low wage labor markets