The Pros and Cons of Sick Pay Schemes: Testing for Contagious Presenteeism and Noncontagious Absenteeism Behavior / Stefan Pichler, Nicolas R. Ziebarth.

Format:

Book

Author/Creator:

Pichler, Stefan.

Contributor:

National Bureau of Economic Research.

Ziebarth, Nicolas R.

Series:

Working Paper Series (National Bureau of Economic Research) no. w22530.

NBER working paper series no. w22530

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Pros and Cons of Sick Pay Schemes

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2016.

Summary:

This paper provides an analytical framework and uses data from the US and Germany to test for the existence of contagious presenteeism and negative externalities in sickness insurance schemes. The first part exploits high-frequency Google Flu data and the staggered implementation of U.S. sick leave reforms to show in a reduced-from framework that population-level influenza-like disease rates decrease after employees gain access to paid sick leave. Next, a simple theoretical framework provides evidence on the underlying behavioral mechanisms. The model theoretically decomposes overall behavioral labor supply adjustments ('moral hazard') into contagious presenteeism and noncontagious absenteeism behavior and derives testable conditions. The last part illustrates how to implement the model exploiting German sick pay reforms and administrative industry-level data on certified sick leave by diagnoses. It finds that the labor supply elasticity for contagious diseases is significantly smaller than for noncontagious diseases. Under the identifying assumptions of the model, in addition to the evidence from the U.S., this finding provides indirect evidence for the existence of contagious presenteeism.

Notes:

Print version record

August 2016.