In 1999, in Germany, the statutory sick pay level was increased from 80 to 100 percent of foregone earnings for sicknessepisodes of up to six weeks. We show that this reform has led to an increase in average absence days of about 10 percent or one additional day per employee, per year. The...

This paper proposes a test for the existence and degree of contagious presenteeism and negative externalities in sickness insurance schemes. First, we theoretically decompose moral hazard into shirking and contagious presenteeism behavior and derive testable conditions. Then, we implement the...

Sick leave payments represent a significant portion of public health expenditures and labor costs. Reductions in replacement levels are a commonly used instrument to tackle moral hazard and to increase the efficiency of the health insurance market. In Germany's Statutory Health Insurance (SHI)...

This paper exploits temporal and spatial variation in the implementation of nine-city- and four state-level U.S. sick pay mandates to assess their labor market consequences. We use the synthetic control group method and traditional difference-in-differences models along with the Quarterly Census...

This study estimates the reform effects of a reduction in statutory sick pay levels on various outcome dimensions. A federal law reduced the legal obligation of German employers to provide 100 percent continued wages for up to six weeks per sickness episode to 80 percent. This measure increased...