Do Employees’ Sickness Absences React to a Change in Costs for Firms? Evidence from a Natural Experiment

Böheim, René and Leoni, Thomas (2019) Do Employees’ Sickness Absences React to a Change in Costs for Firms? Evidence from a Natural Experiment. Scandinavian Journal of Economics. pp. 1-29. ISSN 0347-0520

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Abstract

We analyse the impact of a social security reform that changed the costs incurred by firms due to sickness absences. The reform abolished a compulsory insurance for firms, which insured them against the wages paid to sick blue‐collar workers. During the first year after its introduction, we estimate that the reform resulted in about 6.3 percent fewer sickness absences, and in about 8.6 percent fewer absence days. We do not find evidence for changes in hiring or firing, and we find only limited workforce composition changes. We do not find spillover effects on the absences of white‐collar workers. Robustness checks confirm these results.

Item Type: Article
Keywords: Absenteeism; moral hazard; sickness insurance
Classification Codes: JEL classification: I38; J22
Divisions: Departments > Sozioökonomie > Multi-Level Governance and Development
Version of the Document: Published
Depositing User: Gertraud Novotny
Date Deposited: 28 Feb 2020 13:17
Last Modified: 28 Feb 2020 13:17
FIDES Link: https://bach.wu.ac.at/d/research/results/94436/
URI: https://epub.wu.ac.at/id/eprint/7501

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