In many countries, social security insures firms against their workers' sickness absences. The insurance may create a moral hazard for firms, leading to inefficient monitoring of absences or to an underinvestment in the prevention of absences. We exploit an administrative threshold in the...

In many countries, social security insures firms against their workers' sickness absences. The insurance may create a moral hazard for firms, leading to inefficient monitoring of absences or to an underinvestment in the prevention of absences. We exploit an administrative threshold in the...

Can activation requirements control moral hazard problems in public sickness absence insurance and accelerate recovery? Based on empirical analysis of Norwegian data, we show that it can. Activation requirements not only bring down benefit claims, they also reduce the likelihood that long-term...