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The pros and cons of sick pay schemes: Testing for contagious presenteeism and noncontagious absenteeism behavior

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  • Pichler, Stefan
  • Ziebarth, Nicolas R.

Abstract

This paper provides an analytical framework and uses data from the U.S. and Germany to test for the existence of contagious presenteeism and negative externalities in sick leave insurance. The first part exploits high-frequency Google Flu data and the staggered implementation of U.S. sick pay mandates to show, using a reduced-form framework, that population-level influenza-like disease rates decrease after employees gain access to paid sick leave. Next, a simple theoretical framework provides evidence on the underlying behavioral labor supply mechanisms. The model theoretically decomposes overall labor supply adjustments (“moral hazard”) into contagious presenteeism and noncontagious absenteeism behavior and derives testable conditions. The last part illustrates how to implement the model exploiting a German sick pay reform and administrative industry-level data on certified sick leave by diagnosis. The empirical test finds that the labor supply elasticity for contagious diseases is significantly smaller than for noncontagious diseases. Under the identifying assumptions of the model, this finding provides additional indirect evidence for the existence of contagious presenteeism.

Suggested Citation

  • Pichler, Stefan & Ziebarth, Nicolas R., 2017. "The pros and cons of sick pay schemes: Testing for contagious presenteeism and noncontagious absenteeism behavior," Journal of Public Economics, Elsevier, vol. 156(C), pages 14-33.
  • Handle: RePEc:eee:pubeco:v:156:y:2017:i:c:p:14-33
    DOI: 10.1016/j.jpubeco.2017.07.003
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    Cited by:

    1. Petri Böckerman & Ohto Kanninen & Ilpo Suoniemi, 2018. "A kink that makes you sick: The effect of sick pay on absence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 33(4), pages 568-579, June.
    2. Hernæs, Øystein, 2018. "Activation against absenteeism – Evidence from a sickness insurance reform in Norway," Journal of Health Economics, Elsevier, vol. 62(C), pages 60-68.
    3. Johanna Catherine Maclean & Stefan Pichler & Nicolas R. Ziebarth, 2020. "Mandated Sick Pay: Coverage, Utilization, and Welfare Effects," NBER Working Papers 26832, National Bureau of Economic Research, Inc.
    4. Yun Qiu & Xi Chen & Wei Shi, 0. "Impacts of social and economic factors on the transmission of coronavirus disease 2019 (COVID-19) in China," Journal of Population Economics, Springer;European Society for Population Economics, vol. 0, pages 1-46.
    5. Corey White, 2018. "Measuring the Social and Externality Benefits of Influenza Vaccination," Working Papers 1803, California Polytechnic State University, Department of Economics.
    6. Stefanie Thönnes & Stefan Pichler, 2019. "Sickness absence and unemployment revisited," Working Papers Dissertations 53, Paderborn University, Faculty of Business Administration and Economics.
    7. María José Suárez & Cristina Muñiz, 2018. "Unobserved heterogeneity in work absence," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(8), pages 1137-1148, November.
    8. David Slusky & Richard J. Zeckhauser, 2018. "Sunlight and Protection Against Influenza," NBER Working Papers 24340, National Bureau of Economic Research, Inc.
    9. Stefan Pichler & Nicolas R. Ziebarth, 2020. "Labor Market Effects of U.S. Sick Pay Mandates," Journal of Human Resources, University of Wisconsin Press, vol. 55(2), pages 611-659.
    10. Bryson, Alex & Dale-Olsen, Harald, 2017. "Does Sick Pay Affect Workplace Absence?," IZA Discussion Papers 11222, Institute of Labor Economics (IZA).
    11. Pichler, Stefan & Ziebarth, Nicolas R., 2017. "The pros and cons of sick pay schemes: Testing for contagious presenteeism and noncontagious absenteeism behavior," Journal of Public Economics, Elsevier, vol. 156(C), pages 14-33.
    12. Ziebarth, Nicolas R., 2017. "Social Insurance and Health," IZA Discussion Papers 10918, Institute of Labor Economics (IZA).
    13. Persson, Petra & Rossin-Slater, Maya, 2019. "When Dad Can Stay Home: Fathers' Workplace Flexibility and Maternal Health," CEPR Discussion Papers 13780, C.E.P.R. Discussion Papers.
    14. Spencer Bastani & Tomer Blumkin & Luca Micheletto, 2019. "The Welfare-Enhancing Role of Parental Leave Mandates," Journal of Law, Economics, and Organization, Oxford University Press, vol. 35(1), pages 77-126.
    15. Martin Andersen & Johanna Catherine Maclean & Michael F. Pesko & Kosali I. Simon, 2020. "Effect of a Federal Paid Sick Leave Mandate on Working and Staying at Home: Evidence from Cellular Device Data," NBER Working Papers 27138, National Bureau of Economic Research, Inc.
    16. Mommaerts, Corina & Raza, Syed Hassan & Zheng, Yu, 2019. "The Economic Consequences of Hospitalizations for Older Workers across Countries," CEPR Discussion Papers 13753, C.E.P.R. Discussion Papers.
    17. repec:iab:iabdpa:202006 is not listed on IDEAS
    18. Amelie Schiprowski, 2020. "The Role of Caseworkers in Unemployment Insurance: Evidence from Unplanned Absences," CESifo Working Paper Series 8206, CESifo.
    19. Martin Halla & Susanne Pech & Martina Zweimüller, 2017. "The effect of statutory sick-pay on workers' labor supply and subsequent health," Working Papers 2017-04, Faculty of Economics and Statistics, University of Innsbruck.
    20. Thomas Leoni & René Böheim, 2018. "Fehlzeitenreport 2018. Krankheits- und unfallbedingte Fehlzeiten in Österreich – Präsentismus und Absentismus," WIFO Studies, WIFO, number 61487.
    21. Pichler, Stefan & Ziebarth, Nicolas R., 2019. "Reprint of: The pros and cons of sick pay schemes: Testing for contagious presenteeism and noncontagious absenteeism behavior," Journal of Public Economics, Elsevier, vol. 171(C), pages 86-104.

    More about this item

    Keywords

    Sickness insurance; Paid sick leave; Presenteeism; Contagious diseases; Infections; Negative externalities; Absenteeism; U.S.; Germany;

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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