Discussion Papers
What if they take it all? Impact of zero replacement rates on sickness absence
What if they take it all? Impact of zero replacement rates on sickness absence
Authors:
Pertold, F.
Published: December 2015
Keywords:
sickness absence and incidence, policy reform, heterogeneous impact
JEL classification:
J22, I13
Abstract:
In this paper I investigate the effect of sickness absence reform that reduced the replacement rate during the first three days of absence to zero. Using rich data on about 900,000 workers each quarter I find substantial decrease of sickness absence incidence. The richness of the data allows for studying heterogeneity of the treatment effect on several dimensions, in particular, job as well as firm characteristics. I show that sickness absence was reduced mainly in manufacturing, hotels and restaurant. Further, the low skilled occupations were affected much more compared to high skilled occupations, conditional on wages. I also find females to be more sensitive with respect to the changes of replacement rate compared to men.
