The Sick Pay Trap
Year: 2011
Type: preprint
Study design: Observational Study
Abstract: In most countries, employers are financially responsible for sick pay during an initial period of a worker's absence spell, after which the public insurance system covers the bill. Based on a quasi-natural experiment in Norway, where pay liability was removed for pregnancy-related absences, we show that firms' absence costs significantly affect employees' absence behavior. However, by restricting pay liability to the initial period of the absence spell, firms are discouraged from letting long-term sick workers back into work, since they then face the financial risk associated with subsequent relapses. We show that this disincentive effect is statistically and economically significant.
Source: SSRN Electronic Journal
Authors: Elisabeth Fevang, Simen Markussen, Knut Røed
Language: English
Field: Medicine
Domain: Health Sciences
Open Access status: green
OpenAlex ID: W2076492883