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Moral Hazard in Monday Claim Filing: Evidence from Spanish Sick Leave Insurance

Ángel Martín-Román () and Alfonso Moral ()

The B.E. Journal of Economic Analysis & Policy, 2016, vol. 16, issue 1, 437-476

Abstract: The Monday effect on workers’ compensation insurance shows that there is a higher proportion of hard-to-diagnose injuries the first day of the week. The aim of this paper is to test whether the physiological hypothesis or the economic explanation is more satisfactory to understand this Monday effect and, if both are correct, to obtain an estimation of the magnitude of each of them. To do this, we exploit the singular legal regulation of Spanish sick leave benefits and use this country as a “laboratory”. Our econometric analysis detects and measures a hard-to-diagnose reporting gap on Mondays by about 6.5 percentage points due to physiological reasons and up to 1.4 percentage points attributable to moral hazard for those injuries with a short recovery period.

Date: 2016
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Handle: RePEc:bpj:bejeap:v:16:y:2016:i:1:p:437-476:n:1