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Sick of being “Activated?”

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  • Barbara Hofmann

Abstract

Do unemployment insurance (UI) benefit recipients take sick leave more often when facing “activation” by the employment office? We answer this question using administrative data from the German Federal Employment Agency on vacancy referrals sent to UI benefit recipients. Applying duration analysis, we find an increased transition rate into short-term sick leave among individuals who had received vacancy referrals from the employment office. We find that while men on average report less sick compared to women, they respond stronger to a vacancy referral. In subsequent steps, we test the hypothesis that the results are driven by real illnesses as opposed to shirking. Our findings do not support this hypothesis. We interpret the findings as evidence of moral hazard behavior and as evidence of a side effect of an activation measure. Copyright Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Barbara Hofmann, 2014. "Sick of being “Activated?”," Empirical Economics, Springer, vol. 47(3), pages 1103-1127, November.
    • Handle: RePEc:spr:empeco:v:47:y:2014:i:3:p:1103-1127
    DOI: 10.1007/s00181-013-0761-y
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    Cited by:

    1. Gerard J Van Den Berg & Barbara Hofmann & Arne Uhlendorff, 2016. "The Role of Sickness in the Evaluation of Job Search Assistance and Sanctions," Working Papers 2016-17, Center for Research in Economics and Statistics.

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    More about this item

    Keywords

    Unemployment insurance; Sickness absence; Activation; Moral hazard; I19; J64; J65; J68;
    All these keywords.

    JEL classification:

    • I19 - Health, Education, and Welfare - - Health - - - Other
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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