Arbeitspapier

Sickness absence and search unemployment

The paper presents a model that allows a unified analysis of sickness absence and search unemployment. Sickness appears as random shocks to individual utility functions, interacts with individual searchand labor supply decisions and triggers movements across labor force states. The employed worker prefers absence for sufficiently severe sickness and the unemployed worker may prefer nonparticipation if the disutility of search is amplified by sickness. The decisions governing labor force transitions are influenced by social insurance benefits available for sick or unemployed workers. We examine how these benefits affect individual decisions on absence and search and the implications for employment, unemployment and nonparticipation. The normative analysis of the socially optimal benefit structure suggests that there is, in general, a case for benefit di.erentiation across states of non-work. In particular, there is a case for a benefit structure that rewards active job search.

Language
Englisch

Bibliographic citation
Series: CESifo Working Paper ; No. 1227

Classification
Wirtschaft
Unemployment Insurance; Severance Pay; Plant Closings
Unemployment: Models, Duration, Incidence, and Job Search
Labor Force and Employment, Size, and Structure
Subject
sickness absence
search
unemployment
sickness benefits
unemployment benefits
Fehlzeit
Krankheit
Arbeitsuche
Arbeitslosenversicherung
Theorie

Event
Geistige Schöpfung
(who)
Holmlund, Bertil
Event
Veröffentlichung
(who)
Center for Economic Studies and ifo Institute (CESifo)
(where)
Munich
(when)
2004

Handle
Last update
20.09.2024, 8:21 AM CEST

Data provider

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Object type

  • Arbeitspapier

Associated

  • Holmlund, Bertil
  • Center for Economic Studies and ifo Institute (CESifo)

Time of origin

  • 2004

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