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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)

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

Other versions of this item:

Find related papers by JEL classification:
H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

References listed on IDEAS
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  1. Leigh, J. Paul, 1985. "The effects of unemployment and the business cycle on absenteeism," Journal of Economics and Business, Elsevier, vol. 37(2), pages 159-170, May. [Downloadable!] (restricted)
  2. Johansson, Per & Brannas, Kurt, 1998. "A Household Model for Work Absence," Applied Economics, Taylor and Francis Journals, vol. 30(11), pages 1493-1503, November. [Downloadable!] (restricted)
  3. Johansson, Per & Palme, Mårten, 2001. "Assessing the effect of public policy on worker absenteeism," Working Paper Series 2002:13, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
  4. Barmby, Tim & Orme, Chris D & Treble, John, 1990. "Worker Absenteeism: An Analysis Using Microdata," CEPR Discussion Papers 434, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  5. Thomas Aronsson & James R. Walker, 1997. "The Effects of Sweden's Welfare State on Labor Supply Incentives," NBER Chapters, in: The Welfare State in Transition: Reforming the Swedish Model, pages 203-266 National Bureau of Economic Research, Inc. [Downloadable!]
  6. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June. [Downloadable!] (restricted)
  7. Barmby, Tim & Orme, Chris & Treble, John, 1995. "Worker absence histories: a panel data study," Labour Economics, Elsevier, vol. 2(1), pages 53-65, March. [Downloadable!] (restricted)
  8. Donna B. Gilleskie, 1998. "A Dynamic Stochastic Model of Medical Care Use and Work Absence," Econometrica, Econometric Society, vol. 66(1), pages 1-46, January.
  9. Arai, Mahmood & Skogman Thoursie, Peter, 2001. "Incentives and Selection in Cyclical Absenteeism," Working Paper Series 167, Trade Union Institute for Economic Research. [Downloadable!]
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  10. Neil R. Ericsson & Julia Campos & Hong-Anh Tran, 1991. "PC-give and David Hendry's econometric methodology," International Finance Discussion Papers 406, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  11. Killingsworth, Mark R. & Heckman, James J., 1987. "Female labor supply: A survey," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 2, pages 103-204 Elsevier. [Downloadable!] (restricted)
  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, ILR School, Cornell University, vol. 45(4), pages 764-778, July.
  13. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May. [Downloadable!] (restricted)
  14. Davis, Steven J & Henrekson, Magnus, 1999. " Explaining National Differences in the Size and Industry Distribution of Employment," Small Business Economics, Springer, vol. 12(1), pages 59-83, February. [Downloadable!] (restricted)
    Other versions:
  15. Jushan Bai & Pierre Perron, 1998. "Estimating and Testing Linear Models with Multiple Structural Changes," Econometrica, Econometric Society, vol. 66(1), pages 47-78, January.
    Other versions:
  16. Broström, Göran & Johansson, Per & Palme, Mårten, 2001. "Causal effects of Economic Incentives on Absence from Work: A Duration Analysis Using Fixed Effects," Working Paper Series in Economics and Finance 465, Stockholm School of Economics, revised Jun 2002. [Downloadable!]
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