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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

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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
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  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. 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)
  6. 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)
  7. 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.
  8. Arai, Mahmood & Skogman Thoursie, Peter, 2001. "Incentives and Selection in Cyclical Absenteeism," Working Paper Series 167, Trade Union Institute for Economic Research. [Downloadable!]
    Other versions:
  9. 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.).
  10. 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)
  11. 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.
  12. 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)
  13. 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:
  14. 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:
  15. 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!]
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Hesselius, Patrik, 2003. "Does Sick Absence Increase the Risk of Unemployment?," Working Paper Series 2003:15, Uppsala University, Department of Economics. [Downloadable!]
  2. Lindbeck, Assar & Palme, Mårten & Persson, Mats, 2006. "Job Security and Work Avbsence: Evidence form a Natural Experiment," Seminar Papers 743, Stockholm University, Institute for International Economic Studies. [Downloadable!]
  3. Larsson, Laura, 2002. "Sick of being unemployed? Interactions between unemployment and sickness insurance in Sweden," Working Paper Series 2002:6, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
  4. Davis, Steven J. & Henrekson, Magnus, 2004. "Tax Effects on Work Activity, Industry Mix and Shadow Economy Size: Evidence from Rich-Country Comparisons," Ratio Working Papers 57, The Ratio Institute. [Downloadable!]
    Other versions:
  5. Andrén, Daniela, 2004. "“Never on a Sunday”: Economic Incentives and Sick Leave in Sweden," Working Papers in Economics 136, Göteborg University, Department of Economics. [Downloadable!]
  6. Wolter Hassink & Pierre Koning, 2005. "Do Financial Bonuses to Employees Reduce their Absenteeism? Outcome of a Lottery," Working Papers 05-27, Utrecht School of Economics. [Downloadable!]
    Other versions:
  7. Georges Dionne & Benoit Dostie, 2005. "New Evidence on the Determinants of Absenteeism Using Linked Employer-Employee Data," Cahiers de recherche 0521, CIRPEE. [Downloadable!]
    Other versions:
  8. Daniela Andrén, 2005. "'Never on a Sunday': Economic incentives and short-term sick leave in Sweden," Applied Economics, Taylor and Francis Journals, vol. 37(3), pages 327-338, February. [Downloadable!] (restricted)
  9. Larsson, Laura, 2002. "Sick of Being Unemployed? Interactions Between Unemployment and Sickness Insurance in Sweden," Working Paper Series 2002:5, Uppsala University, Department of Economics. [Downloadable!]
  10. Granlund, David, 2007. "The effect of health care expenditure on sickness absence," UmeÃ¥ Economic Studies 701, Umeå University, Department of Economics, revised 13 Apr 2007. [Downloadable!]
  11. Assar Lindbeck & Marten Palme & Mats Persson, 2006. "Job Security and Work Absence: Evidence from a Natural Experiment," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
    Other versions:
  12. Selén, Jan & Ståhlberg, Ann-Charlotte, 2001. "The Importance of Sickness Benefits Rights for a Comparison of Wages," Working Paper Series 1/2002, Swedish Institute for Social Research. [Downloadable!]
  13. Lusine Lusinyan & Leo Bonato, 2004. "Work Absence in Europe," IMF Working Papers 04/193, International Monetary Fund. [Downloadable!]
    Other versions:
  14. Daniela Andrén, 2007. "Long-term absenteeism due to sickness in Sweden. How long does it take and what happens after?," The European Journal of Health Economics, Springer, vol. 8(1), pages 41-50, March. [Downloadable!] (restricted)
  15. Lindbeck, Assar & Palme, Mårten & Persson, Mats, 2007. "Social Interaction and Sickness Absence," Working Paper Series 725, Research Institute of Industrial Economics. [Downloadable!]
  16. Andreas KUHN & Rafael LALIVE & Josef ZWEIMÜLLER, 2007. "The Public Health Costs of Unemployment," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 07.08, Université de Lausanne, Faculté des HEC, DEEP. [Downloadable!]
  17. Assar Lindbeck & Marten Palme & Mats Persson, 2008. "Social Interaction and Sickness Absence," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
  18. Larsson, Laura, 2004. "Harmonizing unemployment and sickness insurance: Why (not)?," Working Paper Series 2004:8, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
  19. Bokenblom, Mattias & Ekblad, Kristin, 2007. "Sickness Absence and Peer Effects -Evidence from a Swedish Municipality," Working Papers 2007:11, Örebro University, Swedish Business School, revised 19 Feb 2008. [Downloadable!]
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