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The Effects of Expanding the Generosity of the Statutory Sickness Insurance System

Referierte Aufsätze Web of Science

Nicolas R. Ziebarth, Martin Karlsson

In: Journal of Applied Econometrics 29 (2014), 2, S.208-230

Abstract

This article evaluates an expansion of employer-mandated sick leave from 80% to 100% of forgone gross wages in Germany. We employ and compare parametric difference-in-difference (DID), matching DID and mixed approaches. Overall workplace absences increased by at least 10% or 1 day per worker per year. We show that taking partial compliance into account increases coefficient estimates. Further, heterogeneity in response behavior was of great importance. There is no evidence that the increase in sick leave improved employee health, a finding that supports a shirking explanation. Finally, we provide evidence on potential labor market adjustments to the reform.

Topics: Health

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