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

  • Henrekson, Magnus

    ()

    (Stockholm School of Economics)

  • Persson, Mats

    ()

    (Institute for International Economic Studies, Stockholm University)

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.

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Paper provided by Stockholm University, Institute for International Economic Studies in its series Seminar Papers with number 697.

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Length: 35 pages
Date of creation: 25 Sep 2001
Date of revision:
Publication status: Published as Henrekson, Magnus and Mats Persson, 'The Effects on Sick Leave of Changes in the Sickness Insurance System' in Labor Economics, 2004, pages 87-113.
Handle: RePEc:hhs:iiessp:0697
Contact details of provider: Postal: Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden
Phone: +46-8-162000
Fax: +46-8-161443
Web page: http://www.iies.su.se/

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  8. Arai, Mahmood & Thoursie, Peter Skogman, 2005. "Incentives and selection in cyclical absenteeism," Labour Economics, Elsevier, vol. 12(2), pages 269-280, April.
  9. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
  10. Neil R. Ericsson & Julia Campos & Hong-Anh Tran, 1991. "PC-give and David Hendry's econometric methodology," International Finance Discussion Papers 406, Board of Governors of the Federal Reserve System (U.S.).
  11. Davis, Steven J & Henrekson, Magnus, 1999. " Explaining National Differences in the Size and Industry Distribution of Employment," Small Business Economics, Springer, vol. 12(1), pages 59-83, February.
  12. Barmby, Tim & Orme, Chris & Treble, John, 1995. "Worker absence histories: a panel data study," Labour Economics, Elsevier, vol. 2(1), pages 53-65, March.
  13. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
  14. Broström, Göran & Johansson, Per & Palme, Mårten, 2001. "Causal effects of Economic Incentives on Absence from Work: A Duration Analysis Using Fixed Effects," SSE/EFI Working Paper Series in Economics and Finance 465, Stockholm School of Economics, revised Jun 2002.
  15. Per Johansson & Kurt Brafinnafis, 1998. "A household model for work absence," Applied Economics, Taylor & Francis Journals, vol. 30(11), pages 1493-1503.
  16. Leigh, J. Paul, 1985. "The effects of unemployment and the business cycle on absenteeism," Journal of Economics and Business, Elsevier, vol. 37(2), pages 159-170, May.
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