Does Paid Sick Leave Affect Job Turnover?






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091021-WP-Paid-sick-leave-job-turnover-wething


Authors:

Hilary Wething, Pennsylvania State University (Penn State)

Abstract:

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 employeremployee matches, but only among jobs with high levels of instability.



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