Sickness Absence Policies and Labor Market Dynamics
Summary
Sickness absence policies encompass the rules and regulations that govern how and when employees may take time off work due to illness, and how they are compensated during these periods. Such policies play a pivotal role in shaping labour market dynamics by influencing worker behaviour, employer practices and overall economic efficiency. From self-certification periods and medical certification requirements to the level and duration of income replacement, policy design can alter incentives for both absence and return to work. In turn, these incentives intersect with broader labour market conditions—particularly unemployment rates, job security provisions and wage‐setting mechanisms—to determine patterns of absenteeism, productivity and firm operating costs. Employers and policymakers seek to balance adequate health protection against the risk of moral hazard, while ensuring that vulnerable groups, such as low-income or precariously employed workers, are not unduly penalised. Cross‐country comparisons reveal considerable variation in absence duration, reflecting differences in statutory entitlements, monitoring systems and social norms. Advances in quantitative modelling and large‐scale field experiments have begun to untangle the causal pathways by which financial, legal and organisational factors interact to shape absence behaviour and labour market outcomes on a global scale.
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Sickness Absence Policies and Labor Market Dynamics publication trend
The graph below shows the total number of articles in sickness absence policies and labor market dynamics across all publications each year (not limited to Nature Index journals).
Technical terms
Self-certification period: A span of days during which an employee may report illness without medical certification.
Employment Protection Legislation (EPL): Statutory rules that regulate hiring, dismissal and severance to safeguard job security.
Efficiency wage theory: The idea that paying above-market wages reduces worker shirking and absenteeism by increasing the cost of job loss.
Difference-in-Differences: A quasi-experimental statistical method comparing changes over time between treated and control groups.
Dialogue Meetings (DMs): Structured consultations among employers, employees and healthcare professionals to negotiate work resumption plans.
References
- Absenteeism, unemployment and employment protection legislation: evidence from Italy. IZA Journal of Labor Economics (2014).
- Effects of dialogue meetings on sickness absence—Evidence from a large field experiment. Journal of Health Economics (2022).
- Effect of financial incentives on the cost and duration of sickness absence. PLOS ONE (2024).
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