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A Natural Experiment on Sick Pay Cuts, Sickness Absence, and Labor Costs

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  • Ziebarth N
  • Karlsson M

Abstract

This study estimates the reform effects of a reduction in statutory sick pay levels on various outcome dimensions. A federal law reduced the legal obligation of German employers to provide 100 percent continued wages for up to six weeks per sickness episode to 80 percent. This measure increased the ratio of employees having no days of absence by about 7.5 percent. The mean number of absence days per year decreased by about 5 percent. The reform might have reduced total labor costs by about e1.5 billion per year which might have led to the creation of around 50,000 new jobs.

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Bibliographic Info

Paper provided by HEDG, c/o Department of Economics, University of York in its series Health, Econometrics and Data Group (HEDG) Working Papers with number 09/34.

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Date of creation: Dec 2009
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Handle: RePEc:yor:hectdg:09/34

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Postal: HEDG/HERC, Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom
Phone: (0)1904 323776
Fax: (0)1904 323759
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Web page: http://www.york.ac.uk/economics/postgrad/herc/hedg/
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Keywords: sickness absence; statutory sick pay; natural experiment; SOEP;

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References

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