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Benefit Morale and Cross-Country Diversity in Sick Pay Entitlements

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  • Daniel Arnold

    () (Institute for Labour Law and Industrial Relations in the EU, University of Trier)

Abstract

This paper analyzes the impact of a country’s level of benefit morale on generosity of sick pay entitlements by means of a political economy model and an empirical investigation. Higher benefit morale reduces the incidence of absence. On the one hand, this makes insurance cheaper with the usual demand side reaction. On the other hand, being absent less often, the voter prefers less insurance. The former effect dominates at lower, the latter at higher levels of benefit morale. We present empirical evidence for both effects in a sample of 31 countries between 1981 and 2010.

Suggested Citation

  • Daniel Arnold, 2012. "Benefit Morale and Cross-Country Diversity in Sick Pay Entitlements," IAAEU Discussion Papers 201211, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
  • Handle: RePEc:iaa:dpaper:201211
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    4. Goerke, Laszlo & Neugart, Michael, 2017. "Social comparisons in oligopsony," Journal of Economic Behavior & Organization, Elsevier, vol. 141(C), pages 196-209.
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    6. Schnellenbach, Jan & Schubert, Christian, 2015. "Behavioral political economy: A survey," European Journal of Political Economy, Elsevier, vol. 40(PB), pages 395-417.
    7. Jan Schnellenbach & Christian Schubert, 2014. "Behavioral Political Economy: A Survey," CESifo Working Paper Series 4988, CESifo.
    8. Pierre Cahuc & Yann Algan, 2009. "Civic Virtue and Labor Market Institutions," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 111-145, January.
    9. de Pinto Marco & Goerke Laszlo, 2019. "Efficiency Wages in Cournot-Oligopoly," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(4), pages 1-13, October.
    10. Schnellenbach, Jan & Schubert, Christian, 2014. "Behavioral public choice: A survey," Freiburg Discussion Papers on Constitutional Economics 14/03, Walter Eucken Institut e.V..
    11. Laszlo Goerke & Michael Neugart, 2020. "Thorstein Veblen, Joan Robinson, and George Stigler (probably) never met: Social Preferences, Monopsony, and Government Intervention," IAAEU Discussion Papers 202001, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    12. Laszlo Goerke, 2017. "Tax evasion in a Cournot oligopoly with endogenous entry," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(5), pages 754-779, September.

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    More about this item

    Keywords

    sick pay insurance; political economy; work absence; social norms;

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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