A Kink that Makes You Sick: The Effect of Sick Pay on Absence

Petri Böckerman (), Ohto Kanninen and Ilpo Suoniemi

MPRA Paper from University Library of Munich, Germany

Abstract: We exploit a regression kink design to estimate the elasticity of the duration of sickness absence with respect to replacement rate. Elasticity is a central parameter in defining the optimal social insurance scheme compensating for lost earnings due to sickness. We use comprehensive administrative data and a kink in the policy rule near the median earnings. We find a statistically significant estimate of the elasticity of the order of one.

Keywords: Sick pay; labor supply; sickness absence; regression kink design; social insurance (search for similar items in EconPapers)
JEL-codes: H55 I13 J22 (search for similar items in EconPapers)
Date: 2018-06-20
New Economics Papers: this item is included in nep-hea, nep-ias, nep-lma and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Published in Journal of Applied Econometrics 33.4(2018): pp. 568-579

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Related works:
Journal Article: A kink that makes you sick: The effect of sick pay on absence (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:87499

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