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The Effects of Sick-Leaves on Earnings

Author

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  • Markussen, Simen

    (Ragnar Frisch Centre for Economic Research)

Abstract

This paper assesses the causal effect of sick-leaves on subsequent earnings using an administrative dataset for Norway linking individual earnings, sick-leave records and primary care physicians. The leniency of a worker's physician - certifying sickness absence - is used as instrument for sick-leaves. Sick-leaves have a substantial impact on future earnings, reducing earnings by .3 percent per day of absence. When conditioning on full-time employment also two years after sickness the effect is .06 percent per day of absence. These effects are persistent over time and work mainly through wages not hours.

Suggested Citation

  • Markussen, Simen, 2009. "The Effects of Sick-Leaves on Earnings," Memorandum 20/2009, Oslo University, Department of Economics.
  • Handle: RePEc:hhs:osloec:2009_020
    as

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    File URL: https://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2009/Memo-20-2009.pdf
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    References listed on IDEAS

    as
    1. Joshua D. Angrist & Alan B. Krueger, 2001. "Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 69-85, Fall.
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    3. Andrea Ichino & Enrico Moretti, 2009. "Biological Gender Differences, Absenteeism, and the Earnings Gap," American Economic Journal: Applied Economics, American Economic Association, vol. 1(1), pages 183-218, January.
    4. Pfeifer, Christian & Sohr, Tatjana, 2008. "Analysing the Gender Wage Gap Using Personnel Records of a Large German Company," IZA Discussion Papers 3533, Institute for the Study of Labor (IZA).
    5. Barmby, Tim & Orme, Chris & Treble, John, 1995. "Worker absence histories: a panel data study," Labour Economics, Elsevier, vol. 2(1), pages 53-65, March.
    6. Coles, Melvyn G. & Treble, John G., 1996. "Calculating the price of worker reliability," Labour Economics, Elsevier, vol. 3(2), pages 169-188, September.
    7. JÃrgen Hansen, 2000. "The effect of work absence on wages and wage gaps in Sweden," Journal of Population Economics, Springer;European Society for Population Economics, vol. 13(1), pages 45-55.
    8. Joseph G. Altonji & Charles R. Pierret, 2001. "Employer Learning and Statistical Discrimination," The Quarterly Journal of Economics, Oxford University Press, vol. 116(1), pages 313-350.
    9. repec:fth:prinin:455 is not listed on IDEAS
    10. Carlsen, Benedicte & Nyborg, Karine, 2009. "The Gate is Open: Primary Care Physicians as Social Security Gatekeepers," Memorandum 07/2009, Oslo University, Department of Economics.
    11. Coles, Melvyn G. & Treble, John G., 1993. "The price of worker reliability," Economics Letters, Elsevier, vol. 41(2), pages 149-155.
    12. Joshua Angrist & Alan Krueger, 2001. "Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments," Working Papers 834, Princeton University, Department of Economics, Industrial Relations Section..
    13. Hesselius, Patrik, 2007. "Does sickness absence increase the risk of unemployment?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(2), pages 288-310, April.
    14. Weiss, Andrew, 1985. "Absenteeism and wages," Economics Letters, Elsevier, vol. 19(3), pages 277-279.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The Effects of Sick-Leaves on Earnings
      by Ariel Goldring in Free Market Mojo on 2010-02-26 22:39:18

    Citations

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    Cited by:

    1. Markussen, Simen & Røed, Knut & Røgeberg, Ole, 2013. "The changing of the guards," Journal of Health Economics, Elsevier, vol. 32(6), pages 1230-1239.
    2. Markussen, Simen & Mykletun, Arnstein & Røed, Knut, 2010. "The Case for Presenteeism," IZA Discussion Papers 5343, Institute for the Study of Labor (IZA).
    3. Markussen, Simen & Mykletun, Arnstein & Røed, Knut, 2012. "The case for presenteeism — Evidence from Norway's sickness insurance program," Journal of Public Economics, Elsevier, vol. 96(11), pages 959-972.
    4. Markussen, Simen & Røed, Knut & Røgeberg, Ole J., 2013. "The Changing of the Guards: Can Physicians Contain Social Insurance Costs?," IZA Discussion Papers 7122, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    sickness absence; wage formation; IV estimation; wage regression;

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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