Long-term effects of part-time sick leave on the employees' return to work

• Objectives: Despite the limited and relatively weak empirical evidence for the effectiveness of part-time sick leave, the Swedish government has promoted the use of part-time sick leave instead of full-time sick leave, when possible. A few studies reported the effectspart-time sick leave on the probability to return to work. Our paper aims to bring more empirical evidence for the importance of part-time sick leave on the return to work by estimating the effects of part-time sick leave on the probability to return to work for each of the five years after the sickness spell started. Data and Methods: The sample analyzed in this paper is extracted from the National Agency of Social Insurance in Sweden and includes all employees aged 21-56 years in 2006 when they starteda sickness spell of at least two weeks on full-time, and were employed but not on sick leave during 2001-2005. Data include longitudinal information related to both employment and social insurance related events during 2001-2013. The point of departure is an employed individual with a diagnosed health condition and an accompanying reduced work capacity. This implies a choice between part-time or full-time sick leave. The choice of the degree of sick leave is a joint decision made by the employee, the employer, the physician, and the social insurance administrator. The common objective of the four parties is to choose the alternative with the highest likelihood of recovery of the lost work capacity. A suitable structure for this framework is a discrete choice switching regression model with an endogenous switch between the two states: part-time and full-time sick leave. We estimate the effects of part-time sick leave on the probability to return to work for each of the five years after the sickness spell started.Results: The estimates of our two parameters of primary interest, the average treatment effect (ATE) and the expected effect of the treatment on the treated (TT) vary across the years. The ATE-estimates for 2007 and 2008 is negative, but positive for each of the next three years, which shows that employees who switched from full-time to part-time sick leave have on average a lower probability to return to work the first and the second year after the sick leave spell started than employees who were onfull-time sick leave the whole sickness spell. The TT-estimates are negative for all five years, which means that there was a small average lost from part-time sick leave for those who actually were on part-time sick leave.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Nyckelord

part-time sick leave

full-time sick leave

selection

unobserved heterogeneity

treatment effects

Economics

Nationalekonomi

Publikations- och innehållstyp

ref (ämneskategori)

kon (ämneskategori)