The Effects on Sick Leave of Changes in the Sickness Insurance System
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.
|Date of creation:||16 May 2001|
|Date of revision:||08 Aug 2001|
|Publication status:||Published in Journal of Labor Economics, 2004, pages 87-113.|
|Contact details of provider:|| Postal: The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden|
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