Scandinavian Working Papers in Economics

Working Paper Series,
IFAU - Institute for Evaluation of Labour Market and Education Policy

No 2008:8: Monitoring and norms in sickness insurance: empirical evidence from a natural experiment

Patrik Hesselius (), Per Johansson () and Johan Vikström ()
Additional contact information
Patrik Hesselius: Institute for Labour Market Policy Evaluation, Postal: P O Box 513, SE-751 20 Uppsala, Sweden
Per Johansson: IFAU - Institute for Labour Market Policy Evaluation, Postal: P O Box 513, SE-751 20 Uppsala, Sweden
Johan Vikström: IFAU- Institute for Labour Market Policy Evaluation, Postal: P O Box 513, SE-751 20 Uppsala, Sweden

Abstract: We test if social work norms are important for work absence due to self-perceived sickness. To this end, we use a randomized social experiment designed to estimate the effect of monitoring on work absence. The treated were exposed to less monitoring of their eligibility to use sickness insurance, which increased their non-monitored work absence. Based on a difference in differences analysis, we find that the not directly treated also increased their absence as a result of the experiment. By using an instrumental variables estimator, we find significant endogenous social interaction effects. A 10 per cent exogenous shock in work absence would lead to an immediate 5.7 per cent decrease in the hazard out of sickness absence: the long-run effect is calculated as a 13.3 per cent decrease in the corresponding hazard.

Keywords: Work norms; social insurance; social interactions; sickness absence

JEL-codes: C14; C23; C41; J22; Z13

29 pages, May 16, 2008

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