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The Pros and Cons of Sick Pay Schemes: Testing for Contagious Presenteeism and Noncontagious Absenteeism Behavior

In: Social Insurance Programs (Trans-Atlantic Public Economic Seminar - TAPES)

Author

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  • Stefan Pichler
  • Nicolas Ziebarth

Abstract

This paper provides an analytical framework and uses data from the US and Germany to test for the existence of contagious presenteeism and negative externalities in sickness insurance schemes. The first part exploits high-frequency Google Flu data and the staggered implementation of U.S. sick leave reforms to show in a reduced-from 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 mechanisms. The model theoretically decomposes overall behavioral 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 German sick pay reforms and administrative industry-level data on certified sick leave by diagnoses. It finds that the labor supply elasticity for contagious diseases is significantly smaller than for noncontagious diseases. Under the identifying assumptions of the model, in addition to the evidence from the U.S., this finding provides indirect evidence for the existence of contagious presenteeism.
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Suggested Citation

  • Stefan Pichler & Nicolas Ziebarth, 2016. "The Pros and Cons of Sick Pay Schemes: Testing for Contagious Presenteeism and Noncontagious Absenteeism Behavior," NBER Chapters,in: Social Insurance Programs (Trans-Atlantic Public Economic Seminar - TAPES) National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:13810
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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. 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.
    3. repec:eee:jhecon:v:62:y:2018:i:c:p:60-68 is not listed on IDEAS
    4. Ziebarth, Nicolas R., 2017. "Social Insurance and Health," IZA Discussion Papers 10918, Institute for the Study of Labor (IZA).
    5. 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.
    6. repec:spr:eujhec:v:19:y:2018:i:8:d:10.1007_s10198-018-0962-6 is not listed on IDEAS
    7. Pichler, Stefan & Ziebarth, Nicolas R., 2016. "Labor Market Effects of US Sick Pay Mandates," IZA Discussion Papers 9867, Institute for the Study of Labor (IZA).
    8. Alex Bryson & Harald Dale-Olsen, 2017. "Does Sick Pay Affect Workplace Absence?," DoQSS Working Papers 17-12, Department of Quantitative Social Science - UCL Institute of Education, University College London.
    9. David Slusky & Richard J. Zeckhauser, 2018. "Sunlight and Protection Against Influenza," NBER Working Papers 24340, National Bureau of Economic Research, Inc.
    10. repec:wfo:wstudy:61487 is not listed on IDEAS

    More about this item

    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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