Advanced Search
MyIDEAS: Login

The Sick Pay Trap

Contents:

Author Info

  • Fevang, Elisabeth

    () (Ragnar Frisch Centre for Economic Research)

  • Markussen, Simen

    () (Ragnar Frisch Centre for Economic Research)

  • Røed, Knut

    () (Ragnar Frisch Centre for Economic Research)

Abstract

In most countries, employers are financially responsible for sick pay during an initial period of a worker's absence spell, after which the public insurance system covers the bill. Based on a quasi-natural experiment in Norway, where pay liability was removed for pregnancy-related absences, we show that firms' absence costs significantly affect employees' absence behavior. However, by restricting pay liability to the initial period of the absence spell, firms are discouraged from letting long-term sick workers back into work, since they then face the financial risk associated with subsequent relapses. We show that this disincentive effect is statistically and economically significant.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://ftp.iza.org/dp5655.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5655.

as in new window
Length: 22 pages
Date of creation: Apr 2011
Date of revision:
Publication status: forthcoming in: Journal of Labor Economics
Handle: RePEc:iza:izadps:dp5655

Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information:
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Email:

Related research

Keywords: multivariate hazard rate models; experience rating; social insurance; absenteeism;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

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.:
as in new window
  1. Markussen, Simen & Røed, Knut & Røgeberg, Ole J. & Gaure, Simen, 2009. "The Anatomy of Absenteeism," IZA Discussion Papers 4240, Institute for the Study of Labor (IZA).
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Nicolas R. Ziebarth & Martin Karlsson, 2009. "The Effects of Expanding the Generosity of the Statutory Sickness Insurance System," SOEPpapers on Multidisciplinary Panel Data Research 245, DIW Berlin, The German Socio-Economic Panel (SOEP).
  2. René Böheim & Thomas Leoni, 2011. "Firms' Moral Hazard in Sickness Absences," CESifo Working Paper Series 3595, CESifo Group Munich.
  3. Rieck, Karsten Marshall E. & Telle, Kjetil, 2012. "Sick Leave Before, During and After Pregnancy," Working Papers in Economics 06/12, University of Bergen, Department of Economics.
  4. Karsten Marshall Elseth Rieck & Kjetil Telle, 2012. "Sick leave before, during and after pregnancy," Discussion Papers 690, Research Department of Statistics Norway.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp5655

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.