Working Papers in Economics,
University of Gothenburg, Department of Economics

Abstract: The goal of this paper is to analyze short term-absences from work (i.e., periods of seven days or less) in Sweden during a period with two different reforms. As a theoretical model we use a utility-maximization framework with two restrictions (time and budget constraints). Using multiple spell data, short-term absenteeism is analyzed for a period with three regimes, and it is found that the 1991 reform (which lowered the replacement rate) had a stronger effect on the hazard of ending short-term absenteeism than did the 1987 reform (which eliminated the previous unpaid inwaiting dayli, while restricting the remuneration to only those days when people were scheduled to work). Even though economic incentives mattered, people with poorer health did not ioshortenlo their absences in the same extent as those with better health.

Keywords: short-term absenteeism sickness spells; repeated events; unobserved heterogeneity

JEL-codes: I18; J22; J32; J33

44 pages, May 23, 2001

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