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The Effects on Sick Leave of Changes in the Sickness Insurance System

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  • Henrekson, Magnus

    () (Dept. of Economics, Stockholm School of Economics)

  • Persson, Mats

    () (Institute of International Economic Studies, IIES)

Abstract

In order to get a more complete picture of how labor supply is affected by economic incentives, the effects on absenteeism and not just on contracted hours should be taken into account. In particular, absenteeism due to sick leave can be considerable. In this paper we examine whether the level of sick leave compensation affects sick leave behavior. Using time-series data for Sweden spanning a long period (1955–99) with numerous changes of the compensation level, we generally find strong effects of the expected sign. Reforms implying more generous compensation for sick leave tend to be associated with permanent increases in total sick leave per person employed and vice versa. These findings are reinforced in a panel study covering the 1983–91 period.

Suggested Citation

  • Henrekson, Magnus & Persson, Mats, 2001. "The Effects on Sick Leave of Changes in the Sickness Insurance System," SSE/EFI Working Paper Series in Economics and Finance 0444, Stockholm School of Economics, revised 18 Mar 2003.
  • Handle: RePEc:hhs:hastef:0444
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    More about this item

    Keywords

    Absenteeism; Labor supply; Sick leave; Sickness insurance; Social security;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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