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The Pros and Cons of Sick Pay Schemes: Testing for Contagious Presenteeism and Shirking Behavior

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Abstract

This paper proposes a test for the existence and degree of contagious presenteeism and negative externalities in sickness insurance schemes. First, we theoretically decompose moral hazard into shirking and contagious presenteeism behavior and derive testable conditions. Then, we implement the test exploiting German sick pay reforms and administrative industry-level data on certified sick leave by diagnoses. The labor supply adjustment for contagious diseases is significantly smaller than for non-contagious diseases. Lastly, using Google Flu data and the staggered implementation of US sick leave reforms, we show that flu rates decrease after employees gain access to paid sick leave.

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  • Stefan Pichler & Nicolas Ziebarth, 2015. "The Pros and Cons of Sick Pay Schemes: Testing for Contagious Presenteeism and Shirking Behavior," KOF Working papers 15-394, KOF Swiss Economic Institute, ETH Zurich.
  • Handle: RePEc:kof:wpskof:15-394
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    File URL: http://dx.doi.org/10.3929/ethz-a-010681869
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    Cited by:

    1. Ahn, Thomas & Yelowitz, Aaron, 2016. "Paid Sick Leave and Absenteeism: The First Evidence from the U.S," MPRA Paper 69794, University Library of Munich, Germany.
    2. repec:spr:eujhec:v:18:y:2017:i:9:d:10.1007_s10198-017-0878-6 is not listed on IDEAS
    3. Ángel Martín-Román & Alfonso Moral, 2017. "A methodological proposal to evaluate the cost of duration moral hazard in workplace accident insurance," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 18(9), pages 1181-1198, December.
    4. Martin Halla & Susanne Pech & Martina Zweimüller, 2017. "The effect of statutory sick-pay on workers' labor supply and subsequent health," Working Papers 2017-04, Faculty of Economics and Statistics, University of Innsbruck.
    5. Pichler, Stefan & Ziebarth, Nicolas R., 2016. "Labor Market Effects of US Sick Pay Mandates," IZA Discussion Papers 9867, Institute for the Study of Labor (IZA).
    6. David Slusky & Richard J. Zeckhauser, 2018. "Sunlight and Protection Against Influenza," NBER Working Papers 24340, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Sickness Insurance; Paid Sick Leave; Presenteeism; Contagious Diseases; Infections; Negative Externalities; Shirking; US; Germany; KOF-Key-arbeitsmarkt;

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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