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The Effects Of Expanding The Generosity Of The Statutory Sickness Insurance System

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  • Nicolas R. Ziebarth
  • Martin Karlsson

Abstract

SUMMARY This article evaluates an expansion of employer‐mandated sick leave from 80% to 100% of forgone gross wages in Germany. We employ and compare parametric difference‐in‐difference (DID), matching DID and mixed approaches. Overall workplace absences increased by at least 10% 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. Copyright © 2013 John Wiley & Sons, Ltd.

Suggested Citation

  • Nicolas R. Ziebarth & Martin Karlsson, 2014. "The Effects Of Expanding The Generosity Of The Statutory Sickness Insurance System," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 29(2), pages 208-230, March.
    • Handle: RePEc:wly:japmet:v:29:y:2014:i:2:p:208-230
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    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • 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

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