THE EFFECTS OF EXPANDING THE GENEROSITY OF THE STATUTORY SICKNESS INSURANCE SYSTEM |
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| Authors: | Nicolas R. Ziebarth Martin Karlsson |
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| Affiliation: | 1. Department of Policy Analysis and Management, Cornell University, Ithaca, NY, USA;2. DIW Berlin, Germany;3. IZA, Bonn, Germnay;4. University of Duisburg‐Essen, Germany;5. University of Oslo |
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| Abstract: | This article evaluates an expansion of employer‐mandated sick leave from 80% to 100% of forgone gross wages in Germany. We employ and compare parametric difference‐in‐difference (DID), matching DID and mixed approaches. Overall workplace absences increased by at least 10% or 1 day per worker per year. We show that taking partial compliance into account increases coefficient estimates. Further, heterogeneity in response behavior was of great importance. There is no evidence that the increase in sick leave improved employee health, a finding that supports a shirking explanation. Finally, we provide evidence on potential labor market adjustments to the reform. Copyright © 2013 John Wiley & Sons, Ltd. |
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