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As negotiations heat up over the next recovery package, one thing not being talked about is how the cost of extending emergency paid sick and family leave provided in the Families First Coronavirus Response Act would come with a much smaller-than-expected price tag. THREAD 1/10
The cost could be as low as one-fifth of the original estimate for a policy intervention that one study showed likely reduced COVID cases by 15k per day nationwide and assisted working families and economic recovery. 2/10 https://www.healthaffairs.org/doi/10.1377/hlthaff.2020.00863
Recent data from GAO shows that roughly $1.3 billion in credits have been claimed through October 29th by 149,830 employers. This data indicates that the initial score for FFCRA of $105 B was far too high. 3/10 https://www.gao.gov/reports/GAO-21-191/#fn345
Consider that if FFCRA reaches even one-fifth of its projected cost, it would total $20 B – about the same as the current amount projected by the CFRB’s COVID Money Tracker. 4/10 https://www.covidmoneytracker.org/
With only $1.3 billion spent so far, remaining claims would need to exceed $18 B. While we expect the majority of the costs to show up at the end of the year, it would take an enormous spike in claims to reach that level, making this estimate conservative. 5/10
If we use assume that – at most - FFCRA will cost $20 B in total, it would imply that a clean extension of paid sick and family leave for 4-6 months could cost roughly $8 - $13B. 6/10
Of course, there is considerable uncertainty in these projections, as CBO/JCT explained. https://www.cbo.gov/system/files/2020-04/HR6201.pdf 7/10
Studies have found that access to paid sick leave can significantly lower the general flu rate and overall worker absenteeism by reducing the spread of influenza-like illnesses, suggesting a potentially large return on investment. 8/10
One estimate found that reduced absenteeism due to availability of paid sick leave could have saved employers $630 million to $1.88 billion per year on net, in 2016 dollars. A summary of key research can be found here. 9/11
Note that the number of employers claiming sick and family credits on behalf of workers is more than for the Employee Retention Credit and temporary employer-share payroll tax suspension combined, though both programs have disbursed far more in dollar terms. 10/11
While take-up has been lower than expected, FFCRA's had a significant impact. @stefanpichler @NicolasZiebarth and Katherine Wen found that it “helped to flatten the curve” in states where workers gained access to paid sick leave through FFCRA. 11/11 #paidleave #paidsickdays
