The Pros and Cons of Sick Pay Schemes: A Method to Test for Contagious Presenteeism and Shirking Behavior

Stefan Pichler () and Nicolas Ziebarth ()

No 8850, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper proposes a test for the existence and the degree of contagious presenteeism and negative externalities in sickness insurance schemes. First, we theoretically decompose moral hazard into shirking and contagious presenteeism behavior. Then we derive testable conditions for reduced shirking, increased presenteeism, and the level of overall moral hazard when benefits are cut. We implement the test empirically exploiting German sick pay reforms and administrative industry-level data on certified sick leave by diagnoses. The labor supply adjustment for contagious diseases is significantly smaller than for non-contagious diseases, providing evidence for contagious presenteeism and negative externalities which arise in form of infections.

Keywords: presenteeism; sick pay; sickness insurance; contagious diseases; negative externalities; infections; shirking (search for similar items in EconPapers)
JEL-codes: I12 I13 I18 J22 J28 J32 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2015-02
New Economics Papers: this item is included in nep-hea, nep-hrm, nep-ias and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published - revised version published as 'The Pros and Cons of Sick Pay Schemes: Testing for Contagious Presenteeism and Noncontagious Absenteeism Behavior' in: Journal of Public Economics , 2017, 156, 14-33

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Related works:
Working Paper: The Pros and Cons of Sick Pay Schemes: A Method to Test for Contagious Presenteeism and Shirking Behavior (2015)
Working Paper: The Pros and Cons of Sick Pay Schemes: A Method to Test for Contagious Presenteeism and Shirking Behavior (2015)
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