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The Effects of Sick-Leaves on Earnings

Link to article:

[PDF]

Authors:

Markussen, Simen

Year:

2009

Reference:

Memorandum
Number in series: 20

Summary

This paper assesses the causal effect of sick-leaves on subsequent earnings using an administrative dataset for Norway linking individual earnings, sick-leave records and primary care physicians. The leniency of a worker's physician - certifying sickness absence - is used as instrument for sick-leaves. Sick-leaves have a substantial impact on future earnings, reducing earnings by .3 percent per day of absence. When conditioning on full-time employment also two years after sickness the effect is .06 percent per day of absence. These effects are persistent over time and work mainly through wages not hours.

JEL:

C31, J22, J24, J31, J33, J71

Keywords:

sickness absence, wage formation, IV estimation, wage regression

Project:

Oppdragsgiver: Norges forskningsråd
Oppdragsgivers prosjektnr.:
Frisch prosjekt: 1134 - A viable welfare state