DP14899 If Sick-Leave becomes More Costly, Will I go back to Work? Could it be too soon?

Author(s): Olivier Marie, Judit Vall-Castello
Publication Date: June 2020
Date Revised: June 2020
Keyword(s): Absenteeism, Benefit Displacement, Negative Externalities, Paid Sick Leave, Presenteeism, Relapses Contagious Diseases, Sickness Insurance, Spain, Working Accidents
JEL(s): I12, I13, I18, J22, J28, J32
Programme Areas: Labour Economics, Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=14899

We investigate the impact on work absence of a massive reduction in paid sick leave benefits. We exploit a policy change that only affected public sector workers in Spain and compare changes in the number and length of spells they take relative to unaffected private sector workers. Our results highlight a large drop in frequency mostly offset by increases in average duration. Overall, the policy did reduce number of days lost to sick leave. For some, however, return to work may have been premature as we document huge increases in both the proportion of relapses and working accidents rates.