Monitoring and disincentives in containing paid sick leave

D’Amuri, Francesco
Authors registered in the RePEc Author Service: Francesco D'Amuri

Labour Economics, 2017, vol. 49, issue C, 74-83

Abstract: This paper assesses the effectiveness of monitoring and monetary incentives in containing paid sick leave exploiting a sequence of sickness absence policy changes for Italian civil servants. Results, obtained analyzing 2004–2014 data and confirmed by a placebo test, show that sickness absence is sensitive both to the length of the intervals in which random medical inspections are carried out and to a 20% wage cut on short sick leaves. Monitoring was more effective for men while women were more sensitive to the monetary incentives. A simple cost-benefit analysis shows that enhanced monitoring is cost-effective and that without it the cut in replacement rates should have been twice as large in order to have a comparable drop in absence rates.

Keywords: Monetary incentives; Monitoring; Effort; Sickness absence; Public sector labour markets (search for similar items in EconPapers)
JEL-codes: J32 J38 J45 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:49:y:2017:i:c:p:74-83

DOI: 10.1016/j.labeco.2017.09.004

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