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Sick pay, health and work
Umeå University, Faculty of Social Sciences, Department of Economics.
Umeå University, Faculty of Social Sciences, Department of Economics.
2006 (English)Report (Other (popular science, discussion, etc.))
Abstract [en]

The purpose of this paper is to analyze the effects of different sickness insurance regimes on the employee decision reporting sick or not. We can think of the design problem as a representative employer’s decision to determine the optimal relationship between the wage and the sickness pay. The employee bases her decision to work or not on this relative price and her exogenously given health status that varies between individuals. We believe that the incentives present in the model are able to tell as about relevant aspects of the incentives involved in a state managed sickness insurance system. We calculate how the control variables depend on parameters such as the average productivity of the worker, the average productivity of the substitute, the wage of the substitute, and the search cost to find a substitute. Since we assume that the health status of the work force is heterogeneous and represented by a distribution function, we are also able to calculate the change in the work participation rate, as a function of the parameters.

Place, publisher, year, edition, pages
Umeå: Umeå universitet , 2006. , 25 p.
Umeå economic studies, ISSN 0348-1018 ; 695
Keyword [en]
Sickness insurance design, wage setting, and labour force participation
National Category
Research subject
URN: urn:nbn:se:umu:diva-26826OAI: diva2:274254
Available from: 2009-10-27 Created: 2009-10-27 Last updated: 2015-11-11Bibliographically approved

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Granberg, MalinLöfgren, Karl-Gustaf
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