A Kink that Makes You Sick: The Incentive Effect of Sick Pay on Absence

Arbeitspapier

This paper examines the effect of the replacement rule of the Finnish sickness insurance system on the duration of sickness absence. A pre-determined, piecewise linear policy rule in which the replacement rate is determined by past earnings allows identification of the effect using a regression kink design. We find a substantial and robust behavioral response. The statistically significant point estimate of the elasticity of the duration of sickness absence with respect to the replacement rate is on the order of 1.4.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 8205

Classification and Topics

• Classification: Wirtschaft ; Health Insurance, Public and Private ; Health: Government Policy; Regulation; Public Health ; Time Allocation and Labor Supply
• Subject: sick pay ; labor supply ; sickness absence ; paid sick leave ; regression kink design

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Böckerman, Petri ; Kanninen, Ohto ; Suoniemi, Ilpo
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/99004
• Last update: 10.03.2025, 11:43 AM CET