Vortrag
Long-Term Absenteeism and Moral Hazard: Evidence from a Natural Experiment

Nicolas R. Ziebarth


25th Annual Congress of the European Economic Association : EEA 2010
Glasgow, Großbritannien, 23.08.2010 - 26.08.2010



Abstract:
We theoretically and empirically disentangle various effects of two cuts in the statutory sick pay levels in Germany on long-term absenteeism. The reforms have not led to significant changes in the average incidence rate and duration of sick leave periods longer than six weeks. The finding is theoretically confirmed assuming that the long-term sick are seriously sick. Thus, moral hazard is less of an issue in the upper end of the sickness spell distribution. We find effect heterogeneity and duration decreases for certain subsamples. Within ten years, five billion euros were redistributed from the long-term sick to the insurance pool.

Abstract

We theoretically and empirically disentangle various effects of two cuts in the statutory sick pay levels in Germany on long-term absenteeism. The reforms have not led to significant changes in the average incidence rate and duration of sick leave periods longer than six weeks. The finding is theoretically confirmed assuming that the long-term sick are seriously sick. Thus, moral hazard is less of an issue in the upper end of the sickness spell distribution. We find effect heterogeneity and duration decreases for certain subsamples. Within ten years, five billion euros were redistributed from the long-term sick to the insurance pool.

Themen: Arbeit und Beschäftigung



JEL-Classification: I18;J22
Keywords: long-term absenteeism, sick pay, moral hazard, natural experiment, Socio-Economic Panel Study (SOEP)
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