Sick leave and economic incentives : New evidence from personell data

Abstract

The aim of this thesis is to search for economic incentives related to absenteeism at the firm level. Personell data of a large Norwegian group of companies is examined. The analysis compromises both employer and employee behavior. First, it is tested if a relation between sick leave and earnings can be established. In addition, several aspects of the employees' absence behavior are considered.

The results indicate that economic incentives at the firm level indeed are important for sick leave behavior. It is verified that sick leave affects pay rise. Sickness absence in the interval 3 to 5% is estimated to reduce pay rise by around 1.4% relative to those with less than 1% absence. Absence rates above 5% are predicted to be relatively penalized by around 2% less extra pay rise. Self-certified sick leave is appears to be penalized relatively stronger.