The Impact of Paid Sick Leave Mandates on Women's Income and Economic Security

Background and Purpose:

Paid sick leave (PSL) provides workers job-protected paid leave on an as-needed basis to address their own health or care for an ill family member, which may allow women to stay employed or work more hours per week. Gender and racial/ethnic segregation of work result in differential access to PSL: 37% of private-sector workers cannot take a single paid sick day. These workers lose income when they cannot report to work, and job separations are strongly associated with lower lifetime earnings. Several states and cities have recently enacted legislation requiring employers to provide PSL to all workers. This study examines the impact of three state-level PSL mandates on women's income and economic security.

Methods:

I examine the impacts of three recent state-level paid sick leave policies on women's employment and economic security using the 2010-2019 American Community Survey. Difference-in-differences models were used to estimate the effects of PSL mandates implemented in three states (California, Massachusetts, and Oregon) in 2015 and 2016. The sample was limited to female respondents ages 25-64 years (n=4,652,370). Outcomes include the respondents' income in the previous year (adjusted to $2020) and whether the respondent lives below the federal poverty line (FPL). All models are weighted using inverse probability of treatment weights and control for respondent demographic characteristics and state and year fixed-effects. To further isolate women expected to a) have higher need for PSL or b) be most likely to gain access to paid sick leave through legislation, stratified analyses were conducted for mothers, women without post-secondary degrees, service sector workers, and Latinas.

Results:

Women in states that adopted PSL mandates reported annual earnings $2321 higher on average than women living in comparison states. Significant income increases were observed across all subgroups. Women without a post-secondary degree and Latinas experienced less growth in absolute income. PSL mandates also reduced rates of living below the poverty level: overall, women in states that adopted PSL mandates were 0.73 percentage points (p<0.01) less likely to be in poverty. Notably, significant decreases in poverty were observed for women with children generally, but not for those with children under five years. Women without post-secondary degrees saw the largest decrease in poverty with the steepest decline.

Conclusions and Implications:

I find that PSL mandates increased women's income and improved economic security. Consistent and positive outcomes are seen for mothers and women who do not have a post-secondary degree. However, the limited intensity of PSL policies – which provide 5-7 days of flexibility per year - may be insufficient to reduce poverty for women caring for younger children. Additionally, my findings reflect barriers to access and use of PSL experienced by Latinas. PSL is a low-intensity policy that improves women's employment and economic security, and policies should be designed and implemented with equity at the core.