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The Effects of Expanding the Generosity of the Statutory Sickness Insurance System

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  • Ziebarth, Nicolas R.

    ()
    (Cornell University)

  • Karlsson, Martin

    ()
    (University of Duisburg-Essen)

Abstract

This article evaluates an expansion of employer-mandated sick leave from 80 to 100 percent of forgone gross wages in Germany. We employ and compare parametric difference-in-difference (DID), matching DID, and mixed approaches. Overall workplace attendance decreased by at least 10 percent or 1 day per worker per year. We show that taking partial compliance into account increases coefficient estimates. Further, heterogeneity in response behavior was of great importance. There is no evidence that the increase in sick leave improved employee health, a finding that supports a shirking explanation. Finally, we provide evidence on potential labor market adjustments to the reform.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7250.

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Length: 51 pages
Date of creation: Feb 2013
Date of revision:
Handle: RePEc:iza:izadps:dp7250

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Keywords: SOEP; generosity of social insurance; difference-in-differences estimation; employer sick leave mandate; sickness absence; natural experiment;

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Cited by:
  1. Böckerman, Petri & Kanninen, Ohto & Suoniemi, Ilpo, 2014. "A Kink that Makes You Sick: The Incentive Effect of Sick Pay on Absence," IZA Discussion Papers 8205, Institute for the Study of Labor (IZA).
  2. Lechmann, Daniel S. J. & Schnabel, Claus, 2013. "Absence from Work of the Self-Employed: A Comparison with Paid Employees," IZA Discussion Papers 7756, Institute for the Study of Labor (IZA).
  3. Johansson, Per & Karimi, Arizo & Nilsson, J Peter, 2014. "Gender differences in shirking: monitoring or social preferences? Evidence from a field experiment," Working Paper Series, Center for Labor Studies, Uppsala University, Department of Economics 2014:2, Uppsala University, Department of Economics.
  4. Edmundo Beteta & Manuel Willington, 2009. "Planes Mínimos Obligatorios en Mercados de Seguros de Salud Segmentados," Estudios de Economia, University of Chile, Department of Economics, University of Chile, Department of Economics, vol. 36(2 Year 20), pages 217-241, December.
  5. Ziebarth, Nicolas R., 2013. "Long-term absenteeism and moral hazard—Evidence from a natural experiment," Labour Economics, Elsevier, Elsevier, vol. 24(C), pages 277-292.
  6. 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, HEDG, c/o Department of Economics, University of York 09/34, HEDG, c/o Department of Economics, University of York.
  7. Nicolas Ziebarth, 2014. "Assessing the effectiveness of health care cost containment measures: evidence from the market for rehabilitation care," International Journal of Health Care Finance and Economics, Springer, Springer, vol. 14(1), pages 41-67, March.
  8. Schneider, Julia & Beblo, Miriam, 2010. "Health at work - indicators and determinants : a revised literature and data review for Germany," IAB Discussion Paper 201017, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  9. Arnold, Daniel & Brändle, Tobias & Goerke, Laszlo, 2013. "Sickness Absence, Works Councils, and Personnel Problems. Evidence from German Individual and Linked Employer-Employee Data," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79906, Verein für Socialpolitik / German Economic Association.
  10. René Böheim & Thomas Leoni, 2014. "Firms' Sickness Costs and Workers' Sickness Absences," NBER Working Papers 20305, National Bureau of Economic Research, Inc.

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