The short-run impacts of Connecticut’s paid sick leave legislation

Abstract

In 2012, Connecticut became the first state to enact paid sick leave legislation. Using a difference-in-differences framework, we find the law had modest but negative effects on the labour market, particularly on the likelihood of working in the past week.

Keywords:

• paid sick leave
• mandated benefits
• difference-in-differences
• fringe benefits
• employment

JEL Classification:

• J33
• J38
• H75
• I18
• I12

Notes

¹ Other studies of changes in mandated sick leave benefits in Germany show that employees may use more generous benefits as a means to shirk work. See Ziebarth and Karlsson (2010) and Ziebarth and Karlsson (2014).

² http://www.census.gov/acs/www/data_documentation/public_use_microdata_sample/

³ http://www.census.gov/acs/www/Downloads/language_brochures/ACSQandA_ENG10.pdf

⁴ We also estimate our models with an alternate control: New York and New Jersey. Results are qualitatively similar to results with New England states. See Supplementary Tables 1 and 2 at sites.google.com/site/tomsyahn/

⁵ This follows Bollinger and Hirsch (2006).

⁶ The ACS contains annual measures of work, but we cannot use them in the analysis because the answers mostly pertain to the period before the sick leave law.

⁷ If we include state and year fixed effects, state-year trends, individual demographic characteristics, and the state minimum wage, results become statistically insignificant. See Supplementary Table 3.

⁸ See supplementary material for a simple theory model.

⁹ See Supplementary Table 4 for complete results.