City Research Online

Abstract

This paper exploits the staggered implementation of paid sick leave (PSL) mandates to assess their real effects on U.S. corporations. We find that mandatory access to sick pay leads to higher labor productivity and firm profitability. These performance improvements concentrate in industries that require more physical presence in the workplace, which suggests that PSL generates a positive health externality. The effects are also more pronounced for firms with more expensive labor force, indicating that the productivity benefits of sick pay are greater for employees with high human capital, and in counties with higher social capital, where the risk of absenteeism may be less severe.

Publication Type:	Article
Additional Information:	"This is the peer reviewed version of the following article: Chunyu, L., Volpin, P. & Zhu, X. (2026). Do Paid Sick Leave Mandates Increase Productivity?. Journal of Finance, which has been published in final form at onlinelibrary.wiley.com/journal/15406261. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited."
Publisher Keywords:	Paid Sick Leave, Firm Performance, Employee Health, Human Capital
Subjects:	H Social Sciences > HG Finance
Departments:	Bayes Business School Bayes Business School > Faculty of Finance
SWORD Depositor:	Symplectic Administrator

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