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The cost of sickness: On the effect of the duration of sick leave on post-sick leave earnings

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  • Andersen, Signe Hald

Abstract

Studies analysing the effect of the duration of sick leave on subsequent labour market outcomes do not consider the potential endogenous relationship between duration and labour market outcomes. This paper deals with this shortcoming by using a consistent estimator attained through Instrumental Variables methods for estimating the effect of the duration of a sick leave spell on post-sick leave earnings. I use Danish administrative data and a major 2001 reform of the sick leave system as the instrument for duration. I find that the duration of a sick leave spell has both short and long term effects on post-sick leave earnings.

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Bibliographic Info

Article provided by Elsevier in its journal Social Science & Medicine.

Volume (Year): 70 (2010)
Issue (Month): 10 (May)
Pages: 1581-1589

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Handle: RePEc:eee:socmed:v:70:y:2010:i:10:p:1581-1589

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Related research

Keywords: Duration of sick leave Post-sick leave earnings Endogeneity Instrumental variables estimation Denmark;

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Cited by:
  1. Laszlo Goerke & Markus Pannenberg, 2012. "Trade Union Membership and Sickness Absence: Evidence from a Sick Pay Reform," CESifo Working Paper Series 3909, CESifo Group Munich.

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