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The Effects on Sick Leave of Changes in the Sickness Insurance System

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Author Info

  • Henrekson, Magnus

    ()
    (Dept. of Economics, Stockholm School of Economics)

  • Persson, Mats

    ()
    (Institute of International Economic Studies, IIES)

Abstract

In order to get a more complete picture of how labor supply is affected by economic incentives, the effects on absenteeism and not just on contracted hours should be taken into account. In particular, absenteeism due to sick leave can be considerable. In this paper we examine whether the level of sick leave compensation affects sick leave behavior. Using time-series data for Sweden spanning a long period (1955–99) with numerous changes of the compensation level, we generally find strong effects of the expected sign. Reforms implying more generous compensation for sick leave tend to be associated with permanent increases in total sick leave per person employed and vice versa. These findings are reinforced in a panel study covering the 1983–91 period.

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Bibliographic Info

Paper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 0444.

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Length: 27 pages
Date of creation: 16 May 2001
Date of revision: 08 Aug 2001
Publication status: Published in Journal of Labor Economics, 2004, pages 87-113.
Handle: RePEc:hhs:hastef:0444

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Postal: The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden
Phone: +46-(0)8-736 90 00
Fax: +46-(0)8-31 01 57
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Web page: http://www.hhs.se/
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Related research

Keywords: Absenteeism; Labor supply; Sick leave; Sickness insurance; Social security;

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  12. Robert Drago & Mark Wooden, 1992. "The determinants of labor absence: Economic factors and workgroup norms across countries," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 45(4), pages 764-778, July.
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