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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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  • Andersen, Signe Hald, 2010. "The cost of sickness: On the effect of the duration of sick leave on post-sick leave earnings," Social Science & Medicine, Elsevier, vol. 70(10), pages 1581-1589, May.
    • Handle: RePEc:eee:socmed:v:70:y:2010:i:10:p:1581-1589
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    Cited by:

    1. Florian Endel & Jürgen Holl & Michael Wagner-Pinter, 2019. "The burden of morbidity, productivity and earnings," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 46(3), pages 471-486, August.
    2. Goerke, Laszlo & Pannenberg, Markus, 2015. "Trade union membership and sickness absence: Evidence from a sick pay reform," Labour Economics, Elsevier, vol. 33(C), pages 13-25.
    3. Chadi, Adrian & Goerke, Laszlo, 2015. "Missing at Work - Sickness-related Absence and Subsequent Job Mobility," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112862, Verein für Socialpolitik / German Economic Association.
    4. Amélie Speiser, 2021. "Back to work: the effect of a long-term career interruption on subsequent wages in Switzerland," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 157(1), pages 1-14, December.
    5. Schön, Matthias, 2015. "Unemployment, Sick Leave and Health," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113013, Verein für Socialpolitik / German Economic Association.
    6. Ángel Martín-Román & Alfonso Moral, 2017. "A methodological proposal to evaluate the cost of duration moral hazard in workplace accident insurance," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 18(9), pages 1181-1198, December.
    7. Alexander Ahammer, 2016. "How Physicians Affect Patients’ Employment Outcomes Through Deciding on Sick Leave Durations," Economics working papers 2016-05, Department of Economics, Johannes Kepler University Linz, Austria.
    8. Alexander Ahammer & Matthias Fahn & Flora Stiftinger, 2023. "Outside options and worker motivation," Economics working papers 2023-08, Department of Economics, Johannes Kepler University Linz, Austria.
    9. Chadi, Adrian & Goerke, Laszlo, 2018. "Missing at work – Sickness-related absence and subsequent career events," Journal of Economic Behavior & Organization, Elsevier, vol. 153(C), pages 153-176.
    10. Alexander Ahammer, 2018. "Physicians, sick leave certificates, and patients' subsequent employment outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 27(6), pages 923-936, June.

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