Journal of Population Economics

, Volume 25, Issue 4, pp 1287–1306

The individual cost of sick leave

Original Paper


This paper aims to estimate the causal effect of sick leave on subsequent earnings and employment, using an administrative dataset for Norway. To obtain experiment-like variation in sick leave among otherwise similar workers, the leniency of these workers’ physicians—certifying sickness absences—is used as an instrumental variable for sick leave. A 1 percentage point increase in a worker’s sick leave rate is found to reduce his earnings by 1.2% 2 years later. Around half of the reduction in earnings can be explained by a reduction of 0.5 percentage points in the probability of being employed.


Sickness absence Wage formation IV estimation 

JEL Classification

J22 J31 J71 

Supplementary material

148_2011_390_MOESM1_ESM.pdf (448 kb)
(PDF 447 KB)

Copyright information

© Springer-Verlag 2011

Authors and Affiliations

  1. 1.Ragnar Frisch Centre for Economic ResearchOsloNorway

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