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Abstract. Decision‐makers in countries considering adoption or reform of paid sick leave policies need to understand the mechanisms used to finance sick leave provision. Using global data on sick leave legislation, the authors find the type of model used – employer liability, social insurance, social assistance, or a combination thereof – has significant implications for the duration and generosity of sickness benefits. However, they find no significant relationship between the duration or generosity of sick leave and economic indicators such as per capita GDP, unemployment rates, or national competitiveness. Potential mechanisms enabling both effective sick leave policies and strong economic outcomes are discussed.

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