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

Abstract: Long-term absenteeism due to sickness has been increasing in the past two decades. This has raised many questions about causes, financing, and policy measures to prevent further increases. Answering these questions is even more important in a society with an aging population, which is expected to record even more cases. With data from the Swedish National Insurance Board, proportional hazards models for multiple spells are used in this study to account for shared unobserved group-level characteristics (or frailty) associated with long-term sickness. When the spells were grouped by individual,diagnosis or region, there were significant positive random effects. There was "more" heterogeneity among diagnosis-groups and individual-groups than among regions as groups. Both individual and labor market characteristics had significant effects on the length of absence, which suggests policies aimed to prevent and slow down the increasing trend of long-term sickness of those in older age-groups, but also special policies orientated to prevent deterioration of health status of younger employees.

Keywords: long-term sickness; absenteeism; multiple spells; unobserved heterogeneity

JEL-codes: J20; J30; J70

34 pages, May 23, 2001

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