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Paid Sick Leave and Employee Absenteeism

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Abstract

This paper studies the response of sickness absences to changes in the replacement rate for sick leave. In June 2008 a national law modified both the strength of monitoring and the monetary cost of sick leaves for public sector employees in Italy. This paper focuses on the National Health Service, which accounts for about 21% of the total number of workers employed in the Italian public administration. Using administrative data I show that absenteeism largely decreased following the reform. I identify the effects of an increase in the monetary cost of an absence using a difference-in-differences strategy that exploits variation in changes to the replacement rate for sick leave. Under the assumption that changes in monitoring had the same proportional impact on absenteeism within the same institutions, I estimate that a 1 percentage point decrease in the replacement rate reduces absenteeism by 1%. JEL Classification: J88, J08.

Suggested Citation

  • Annalisa Scognamiglio, 2019. "Paid Sick Leave and Employee Absenteeism," CSEF Working Papers 530, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  • Handle: RePEc:sef:csefwp:530
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    File URL: http://www.csef.it/WP/wp530.pdf
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    Keywords

    Public sector absenteeism; paid sick leave; incentives.;

    JEL classification:

    • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies

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