Arbeitspapier

Dismissal protection and long-term sickness absence: First evidence from Germany

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This paper analyses the causal effects of weaker dismissal protection on the incidence of long-term sickness (> six weeks). We exploit a German policy change, which shifted the threshold exempting small establishments from dismissal protection from five to ten workers. Using administrative data, we find a significantly negative reform effect on transitions into long-term sickness in the second year after a worker has entered an establishment. This response is due to a behavioural, rather than a compositional effect and is particularly pronounced among medium-skilled males. Our results further indicate that the reform did not alter the probability of involuntary unemployment after sickness.

Language: Englisch

Bibliographic citation: Series: ZEW Discussion Papers ; No. 20-040

Classification: Wirtschaft
Institutions: Design, Formation, Operations, and Impact
Health Behavior
Safety; Job Satisfaction; Related Public Policy
Wages, Compensation, and Labor Costs: Public Policy
Labor Standards: Public Policy
Labor Turnover; Vacancies; Layoffs
Labor Law

Subject: dismissal protection
long-term sickness
involuntary unemployment
difference-in-differences
administrative data
small establishments

Event: Geistige Schöpfung

(who): Gürtzgen, Nicole
Hiesinger, Karolin

Event: Veröffentlichung

(who): ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung

(where): Mannheim

(when): 2020

Handle: http://hdl.handle.net/10419/223353

Last update: 10.03.2025, 11:44 AM CET

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Object type

Arbeitspapier

Associated

Gürtzgen, Nicole
Hiesinger, Karolin
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung

Time of origin

2020

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