Estimating the impact of state paid sick leave laws on worker outcomes in the U.S. service sector, 2017-2023

In the absence of a federal paid sick leave (PSL) standard, numerous U.S. states have passed laws to provide workers access to such benefits. These laws may be especially beneficial for low-wage workers whose employers often do not voluntarily provide PSL. We draw on novel data from The Shift Project (N = 68,930), which surveyed U.S. service sector workers between 2017 and 2023, to examine the effects of state PSL laws on proximate worker outcomes (i.e., PSL coverage and presenteeism), downstream worker outcomes (e.g., health, well-being, and labor market outcomes), and firms' channels of adjustment (e.g., hourly wages, work schedules, other fringe benefits). We use stacked difference-in-differences models to estimate the effects of 11 state PSL laws on service sector workers, leveraging the time horizon and scope of our data to make comparisons between treatment and control states before and after the implementation of such laws. We find that state PSL laws increased hourly service sector workers' access to PSL by 14 percentage points (p < 0.001) and reduced the share of workers who worked while sick by 3 percentage points (p < 0.01). In addition, we find little evidence that firms offset the costs of providing PSL by reducing other benefits for workers. This increase in PSL coverage among service sector workers and their reduced likelihood of working while sick could have significant positive implications for public health. But, we also show that PSL laws have little demonstrable effect on other downstream health, well-being, and labor market outcomes for covered workers.