Reductions in SI replacement levels has been a widely used instrument to lower sickness absence rates. The idea is that increasing the direct cost of absence would lower the absence rate. This paper explores a reform to the compulsory Swedish SI that meant that the replacement rate varied over...

This paper examines the effect of the replacement rule of the Finnish sickness insurance system on the duration of sickness absence. A pre-determined, piecewise linear policy rule in which the replacement rate is determined by past earnings allows identification of the effect using a regression...