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The Effects of a Sick Pay Reform on Absence and on Health-Related Outcomes

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  • Puhani, Patrick A.

    () (University of Hannover)

  • Sonderhof, Katja

    () (University of Hannover)

Abstract

We evaluate the effects of a reduction in sick pay from 100 to 80% of the wage. Unlike previous literature, apart from absence from work, we also consider effects on doctor/hospital visits and subjective health indicators. We also add to the literature by estimating both switch-on and switch-off effects, because the reform was repealed two years later. We find a two-day reduction in the number of days of absence. Quantile regression reveals higher point estimates (both in absolute and relative terms) at higher quantiles, meaning that the reform predominantly reduced long durations of absence. In terms of health, the reform reduced the average number of days spent in hospital by almost half a day, but we cannot find robust evidence for negative effects on health outcomes or perceived liquidity constraints.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4607.

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Length: 54 pages
Date of creation: Dec 2009
Date of revision:
Publication status: published in: Journal of Health Economics, 2010, 29 (2), 285-302
Handle: RePEc:iza:izadps:dp4607

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Related research

Keywords: intrinsic motivation; sickness pay; absenteeism; health expenditure; hospitalization; difference-in-differences; switch on; switch off; quantile regression;

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References

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Citations

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Cited by:
  1. Keith Bender & Colin Green & John Heywood, 2012. "Piece rates and workplace injury: Does survey evidence support Adam Smith?," Journal of Population Economics, Springer, vol. 25(2), pages 569-590, January.
  2. Thomas Cornelißen & Oliver Himmler & Tobias Koenig, 2012. "Fairness Spillovers – The Case of Taxation," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2012_17, Max Planck Institute for Research on Collective Goods.
  3. Ziebarth N & Karlsson M, 2009. "A Natural Experiment on Sick Pay Cuts, Sickness Absence, and Labor Costs," Health, Econometrics and Data Group (HEDG) Working Papers 09/34, HEDG, c/o Department of Economics, University of York.
  4. Martin Ljunge, 2011. "Sick of Taxes? Evidence on the Elasticity of Labor Supply when Workers Are Free to Choose," Discussion Papers 11-27, University of Copenhagen. Department of Economics.
  5. Patrick A. Puhani & Katja Sonderhof, 2009. "The Effects of a Sick Pay Reform on Absence and on Health-Related Outcomes," SOEPpapers on Multidisciplinary Panel Data Research 248, DIW Berlin, The German Socio-Economic Panel (SOEP).
  6. Mohamed Ali Ben Halima & Thierry Debrand & Camille Regaert, 2011. "Arrêts maladie : comprendre les disparités départementales," Working Papers DT39, IRDES institut for research and information in health economics, revised Feb 2011.
  7. Guy Lacroix & Marie-Ève Brouard, 2011. "Work Absenteeism Due to a Chronic Disease," Cahiers de recherche 1108, CIRPEE.
  8. Mohamed Ali Ben Halima & Thierry Debrand & Camille Regaert, 2012. "Sick Leaves: Understanding Disparities Between French Departments," Working Papers DT50, IRDES institut for research and information in health economics, revised Oct 2012.
  9. Livanos, Ilias & Zangelidis, Alexandros, 2010. "Sickness Absence: a Pan-European Study," MPRA Paper 22627, University Library of Munich, Germany.

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