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

30 Pages Posted: 5 Jul 2007

See all articles by Magnus Henrekson

Magnus Henrekson

Research Institute of Industrial Economics (IFN)

Mats Persson

Stockholm University; CESifo (Center for Economic Studies and Ifo Institute)

Abstract

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.

Keywords: Absenteeism, Labor supply, Sick leave, Sickness insurance, Social security

JEL Classification: H55, I38, J22

Suggested Citation

Henrekson, Magnus and Persson, Mats, The Effects on Sick Leave of Changes in the Sickness Insurance System. Journal of Labor Economics, Vol. 22, No. 1, 2004. Available at SSRN: https://ssrn.com/abstract=998257

Magnus Henrekson (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

P.O. Box 55665
Grevgatan 34
Stockholm, SE-10215
Sweden
+46-8-6654502 (Phone)
+46-8-6654599 (Fax)

HOME PAGE: http://www.ifn.se/mh

Mats Persson

Stockholm University ( email )

Stockholm, SE-10691
Sweden

HOME PAGE: http://www.cesifo.de

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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