A kink that makes you sick : The effect of sick pay on absence
Abstract
We exploit a regression kink design to estimate the elasticity of the duration of
sickness absence with respect to replacement rate. Elasticity is a central parameter
in defining the optimal social insurance scheme compensating for lost
earnings due to sickness. We use comprehensive administrative data and a kink
in the policy rule near the median earnings. We find a statistically significant
estimate of the elasticity of the order of one.
Main Authors
Format
Articles
Research article
Published
2018
Series
Subjects
Publication in research information system
Publisher
John Wiley and Sons Ltd.
The permanent address of the publication
https://urn.fi/URN:NBN:fi:jyu-201806042994Käytä tätä linkitykseen.
Review status
Peer reviewed
ISSN
0883-7252
DOI
https://doi.org/10.1002/jae.2620
Language
English
Published in
Journal of Applied Econometrics
Citation
- Böckerman, P., Kanninen, O., & Suoniemi, I. (2018). A kink that makes you sick : The effect of sick pay on absence. Journal of Applied Econometrics, 33(4), 568-579. https://doi.org/10.1002/jae.2620
License
Funder(s)
Research Council of Finland
Funding program(s)
Strategisen tutkimuksen ohjelmat STN, SA
Strategic research programmes, AoF
Additional information about funding
We would like to thank the Social Insurance Institution of Finland (KELA) for financial support and access to their data. Financial support from the Academy of Finland Strategic Research Council project Work, Inequality and Public Policy (number 293120) is also gratefully acknowledged. We are grateful to the co‐editor (Thierry Magnac), and Mark Borgschulte, Nadine Chlaß, Ulla Hämäläinen, Olli Kangas, Lance Lochner, Benjamin Marx, Tuomas Matikka, Jukka Pirttilä, Marko Terviö, and Jouko Verho for comments. We also thank participants at the World Congress of the Econometric Society (Montreal), the EEA, EALE, IIPF, the Royal Economic Society, and the Finnish Economic Association annual meetings as well as the Aboa Centre for Economics, HECER, KELA, Government Institute for Economic Research, the Labour Institute for Economic Research, and University of Illinois microeconomics seminars for comments. We are also grateful to Zhuan Pei for his help with the method. The data used in this study are confidential, but other researchers can independently obtain access to them for replication purposes by obtaining permission from the Social Insurance Institution of Finland.
Copyright© 2018 The Authors