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Do Employees’ Sickness Absences React to a Change in Costs for Firms? Evidence from a Natural Experiment

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  • René Böheim
  • Thomas Leoni

Abstract

We analyse the impact of a social security reform that changed the costs incurred by firms due to sickness absences. The reform abolished a compulsory insurance for firms, which insured them against the wages paid to sick blue‐collar workers. During the first year after its introduction, we estimate that the reform resulted in about 6.3 percent fewer sickness absences, and in about 8.6 percent fewer absence days. We do not find evidence for changes in hiring or firing, and we find only limited workforce composition changes. We do not find spillover effects on the absences of white‐collar workers. Robustness checks confirm these results.

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  • René Böheim & Thomas Leoni, 2020. "Do Employees’ Sickness Absences React to a Change in Costs for Firms? Evidence from a Natural Experiment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 122(2), pages 553-581, April.
    • Handle: RePEc:bla:scandj:v:122:y:2020:i:2:p:553-581
    DOI: 10.1111/sjoe.12335
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    1. Hall, Caroline & Liljeberg, Linus & Lindahl, Erica, 2024. "Firm responses to a more generous insurance against high sick pay costs," Labour Economics, Elsevier, vol. 86(C).

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