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

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 8850

Classification and Topics

• Classification: Wirtschaft ; Health Behavior ; Health Insurance, Public and Private ; Health: Government Policy; Regulation; Public Health ; Time Allocation and Labor Supply ; Safety; Job Satisfaction; Related Public Policy ; Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
• Subject: sickness insurance ; sick pay ; presenteeism ; contagious diseases ; infections ; negative externalities ; shirking

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Pichler, Stefan ; Ziebarth, Nicolas R.
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/110155
• Last update: 10.03.2025, 11:44 AM CET