The Effect of Statutory Sick Pay Regulations on Workers' Health

Martin Halla, Susanne Pech () and Martina Zweimüller
Additional contact information
Susanne Pech: University of Linz

No 9091, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Social insurance programs typically comprise sick leave insurance. An important policy parameter is how the cost of sick leave are shared between workers, firms, and the social security system. We show that this sharing rule affects not only absence behavior, but also workers' subsequent health. To inform our empirical analysis we propose a simple model, where workers' absence decision is taken conditional on the sharing rule, health, and a dismissal probability. Our empirical analysis is based on high-quality administrative data sources from Austria. Identification is guaranteed by idiosyncratic variation in the sharing rule (caused by different policy reforms and sharp discontinuities at certain tenure levels and firm sizes). An increase in either the workers' or the firms' cost share (both at the public expense) decrease the number of sick leave days. Variations in the workers' cost are quantitatively more important (by a factor of about two). Policy-induced variation in sick leave has a significant effect on subsequent health (care cost). The average worker in our sample is in the domain of presenteeism, i.e. an increase in sick leave (due to reductions in the workers' or the firms' cost share) would reduce health care cost.

Keywords: statutory sick-pay regulations; sick leave; presenteeism; absenteeism; moral hazard; health care cost (search for similar items in EconPapers)
JEL-codes: I18 J22 J38 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2015-05
New Economics Papers: this item is included in nep-eur, nep-hea, nep-ias and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://docs.iza.org/dp9091.pdf (application/pdf)

Related works:
Working Paper: The Effect of Statutory Sick Pay Regulations on Workers’ Health (2015)
Working Paper: The Effect of Statutory Sick Pay Regulations on Workers’ Health (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp9091

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().