Long-term absenteeism and moral hazard—Evidence from a natural experiment

Nicolas Ziebarth ()

Labour Economics, 2013, vol. 24, issue C, 277-292

Abstract: This paper shows that long-term sick employees are unlikely to be very responsive to moderate monetary labor supply incentives. The paper, theoretically and empirically, evaluates the labor supply effects of cuts in statutory sick pay levels on long-term absenteeism in Germany. Cutting sick pay did not significantly reduce the average incidence and duration of sick leave periods longer than six weeks. A simple theoretical model confirms the empirical findings under the assumption that the long-term sick are seriously sick. Thus, moral hazard seems to be less of an issue in the upper tail of the sickness spell distribution. However, the results show heterogeneity in the effects and significant duration decreases for certain subsamples.

Keywords: Long-term absenteeism; Statutory long-term sick pay; Moral hazard; Natural experiment; Socio-Economic Panel Study (SOEP) (search for similar items in EconPapers)
JEL-codes: D03 D31 H51 I18 J22 J32 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (46)

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Related works:
Working Paper: Long-Term Absenteeism and Moral Hazard: Evidence from a Natural Experiment (2009)
Working Paper: Long-Term Absenteeism and Moral Hazard: Evidence from a Natural Experiment (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:24:y:2013:i:c:p:277-292

DOI: 10.1016/j.labeco.2013.09.004

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