Empirical Economics

, Volume 47, Issue 3, pp 1103–1127 | Cite as

Sick of being “Activated?”

Vacancy referrals and sickness absence among unemployment insurance benefit recipients
  • Barbara Hofmann


Do unemployment insurance (UI) benefit recipients take sick leave more often when facing “activation” by the employment office? We answer this question using administrative data from the German Federal Employment Agency on vacancy referrals sent to UI benefit recipients. Applying duration analysis, we find an increased transition rate into short-term sick leave among individuals who had received vacancy referrals from the employment office. We find that while men on average report less sick compared to women, they respond stronger to a vacancy referral. In subsequent steps, we test the hypothesis that the results are driven by real illnesses as opposed to shirking. Our findings do not support this hypothesis. We interpret the findings as evidence of moral hazard behavior and as evidence of a side effect of an activation measure.


Unemployment insurance Sickness absence Activation Moral hazard 

JEL Classification

I19 J64 J65 J68 



I thank Elke J. Jahn, Regina T. Riphahn, Joachim Wolff and participants of ESPE, EEA, IAB/Aarhus School of Business workshop, DGS ModSim for valuable comments and the IAB IT department, particularly Karl Schmidt, for information on the data. Any remaining errors are my own. Financial support from the Institute for Employment Research (IAB) graduate school is gratefully acknowledged.


  1. Abbring JH, van den Berg GJ (2003a) The nonparametric identification of treatment effects in duration models. Econometrica 71(5):1491–1517CrossRefGoogle Scholar
  2. Abbring JH, van den Berg GJ (2003b) A simple procedure for the evaluation of treatment effects on duration variables. IZA Discussion Papers 810, Institute for the Study of Labor (IZA), BonnGoogle Scholar
  3. Abbring JH, van den Berg GJ (2007) The unobserved heterogeneity distribution in duration analysis. Biometrika 94(1):87–99CrossRefGoogle Scholar
  4. Barros PP, Machado MP, de Galdeano AS (2008) Moral hazard and the demand for health services: a matching estimator approach. J Health Econ 27(4):1006–1025CrossRefGoogle Scholar
  5. Blank F (2011) Aktivierung, aktiv und passiv: soziale Rechte im Bereich Beschäftigung unter der rot-grünen Koalition. In: Soziale Rechte 19982005. SpringerGoogle Scholar
  6. Brown S, Roberts J, Taylor K (2011) The gender reservation wage gap: evidence from British panel data. Econ Lett 113(1):88–91CrossRefGoogle Scholar
  7. Caliendo M, Tatsiramos K, Uhlendorff A (2013) Benefit duration, unemployment duration and job match quality: a regression-discontinuity approach. J Appl Econ 28(4):604–627CrossRefGoogle Scholar
  8. Dundler A (2006) Description of the person-related variables from the datasets IEBS, IABS and LIAB, Version 1.0—handbook version 1.0.0. FDZ Datenreport 04. Institute for Employment Research (IAB), NurembergGoogle Scholar
  9. Evans WN, Schwab RM (1995) Finishing high school and starting college: do catholic schools make a difference? Q J Econ 110(4):941–974CrossRefGoogle Scholar
  10. Hall C, Hartman L (2010) Moral hazard among the sick and unemployed: evidence from a swedish social insurance reform. Emp Econ 39(1):27–50CrossRefGoogle Scholar
  11. Henningsen M (2008) Benefit shifting: the case of sickness insurance for the unemployed. Labour Econ 15(6):1238–1269CrossRefGoogle Scholar
  12. Henrekson M, Persson M (2004) The effects on sick leave of changes in the sickness insurance system. J Labor Econ 22(1):87–114CrossRefGoogle Scholar
  13. Hesselius P, Johansson P, Larsson L (2005) Monitoring sickness insurance claimants—evidence from a social experiment. Working Paper Series 15. IFAU-Institute for Labour Market Policy Evaluation, UppsalaGoogle Scholar
  14. Hofmann B (2012) Short- and long-term ex-post effects of unemployment insurance sanctions. J Econ Stat (Jahrbücher für Nationalökonomie und Statistik) 232(1):31–60Google Scholar
  15. Ichino A, Riphahn RT (2005) The effect of employment protection on worker effort: a comparison of absenteeism during and after probation. J Eur Econ Assoc 3(1):120–143CrossRefGoogle Scholar
  16. Johansson P, Lindahl E (2013) Can sickness absence be affected by information meetings? Evidence from a social experiment. Emp Econ 44(3):1673–1695Google Scholar
  17. Johansson P, Palme M (2002) Assessing the effect of public policy on worker absenteeism. J Hum Resour 37(2):381–409CrossRefGoogle Scholar
  18. Johansson P, Palme M (2005) Moral hazard and sickness insurance. J Public Econ 89(9–10):1879–1890CrossRefGoogle Scholar
  19. Kluve J (2010) The effectiveness of european active labor market programs. Labour Econ 17(6):904–918CrossRefGoogle Scholar
  20. Larsson L (2006) Sick of being unemployed? Interactions between unemployment and sickness insurance. Scand J Econ 108(1):97–113CrossRefGoogle Scholar
  21. Meyer BD (1990) Unemployment insurance and unemployment spells. Econometrica 58(4):757–782CrossRefGoogle Scholar
  22. Pollmann-Schult M (2005) Führen verschärfte Zumutbarkeitsregels der Arbeitsvermittlung zu schnellerer Wiederbeschäftigung?—Empirische Analysen zur Wirkung der Neuregelung der Zumutbarkeitsbestimmungen im jahr 1997. Zeitschrift für Sozialreform 51(3):315–336Google Scholar
  23. Puhani PA, Sonderhof K (2010) The effects of a sick pay reform on absence and on health-related outcomes. J Health Econ 29(2):285–302CrossRefGoogle Scholar
  24. Riphahn RT, Thalmaier A (2001) Behavioral effects of probation periods: an analysis of worker absenteeism. J Econ Stat 221:179–201Google Scholar
  25. Riphahn RT, Wambach A, Million A (2003) Incentive effects in the demand for health care: a bivariate panel count data estimation. J Appl Econ 18(4):387–405CrossRefGoogle Scholar
  26. Thoursie PS (2004) Reporting sick: are sporting events contagious? J Appl Econ 19(6):809–823CrossRefGoogle Scholar
  27. van den Berg GJ (2001) Duration models: specification, identification and multiple durations. In: Heckman J, Leamer E (eds) Handbook of econometrics, handbook of econometrics, vol 5. Elsevier, Chap 55, pp 3381–3460Google Scholar
  28. van den Berg GJ, Hofmann B, Uhlendorff A (2013) The role of sickness in the evaluation of job search assistance and sanctions. Tech. rep., mimeoGoogle Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2013

Authors and Affiliations

  1. 1.Institute for Employment Research (IAB) of the Federal Employment AgencyNurembergGermany
  2. 2.Department of EconomicsUniversity of MannheimMannheimGermany

Personalised recommendations