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
Article

Abstract

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.

Keywords

Unemployment insurance Sickness absence Activation Moral hazard 

JEL Classification

I19 J64 J65 J68 

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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

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