Abstract
Illness-related absence from work is a problem with disruptive consequences and several economic implications. As a result, ongoing research seeks to reduce this problem by examining the effect of health insurance on sickness absence. So far, the studies have tilted toward advanced countries with insufficient attention paid to employer-provided health insurance in developing countries. In this paper, we bridge this research gap by focusing on a Sub-Saharan African country to investigate whether employer-provided health insurance reduces the likelihood of sickness absence and the associated number of working days lost. Binary logistic regression and negative binomial regression techniques are applied to data from the World Bank’s Skills Toward Employment and Productivity (STEP) survey in Ghana. After addressing econometric issues relating to endogeneity and insurance-selection effects, the results show that employees who benefit from employer-provided insurance are less likely to report sickness absence from work and record fewer working days lost compared to their counterpart workers who self-finance their health insurance. These findings contribute insights from a developing country that employees can use as a bargaining tool and raison d'être for employers to sponsor health insurance for their workers. Policymakers can also advocate mandatory health insurance in workplaces based on these findings.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Data availability
Published by the World Bank.
Code availability
Not applicable.
References
Afsa C, Givord P (2014) The impact of working conditions on sickness absence: a theoretical model and an empirical application to work schedules. Empir Econ 46(1):285–305
Ayanore MA, Pavlova M, Kugbey N, Fusheini A, Tetteh J, Ayanore AA, Akazili J, Adongo PB, Groot W (2019) Health insurance coverage, type of payment for health insurance, and reasons for not being insured under the National Health Insurance Scheme in Ghana. Health Econ Rev 9(1):1–5
Barmby T, Sessions J, Treble J (1994) Absenteeism, efficiency wages and shirking. Scand J Econ 96(4):561–566
Bloom DE, Canning D, Sevilla J (2004) The effect of health on economic growth: a production function approach. World Dev 32(1):1–13
Brown S, Sessions JG (1996) The economics of absence: theory and evidence. J Econ Surv 10(1):23–53
Buchmueller TC, DiNardo J, Valletta RG (2002) Union effects on health insurance provision and coverage in the United States. ILR Rev 55(4):610–627
Cai L, Kalb G (2006) Health status and labour force participation: evidence from Australia. Health Econ 15(3):241–261
Chatterji M, Tilley CJ (2002) Sickness, absenteeism, presenteeism, and sick pay. Oxf Econ Pap 54(4):669–687
Cheng L, Liu H, Zhang Y, Shen K, Zeng Y (2015) The impact of health insurance on health outcomes and spending of the elderly: evidence from China’s new cooperative medical scheme. Health Econ 24(6):672–691
Cheng TC, Li J, Vaithianathan R (2019) Monthly spending dynamics of the elderly following a health shock: evidence from Singapore. Health Econ 28(1):23–43
Christmals CD, Aidam K (2020) Implementation of the National Health Insurance Scheme (NHIS) in Ghana: lessons for South Africa and low-and middle-income countries. Risk Manag Healthc Policy 13:1879
Coles MG, Treble JG (1993) The price of worker reliability. Econ Lett 41(2):149–155
Cotter KD, Jensen GA (1989) Choice of purchasing arrangements in insurance markets. J Risk Uncertain 2(4):405–414
Cropper ML (1977) Health, investment in health, and occupational choice. J Polit Econ 85(6):1273–1294
Cutler DM, Gruber J (1997) Medicaid and private insurance: evidence and implications. Health Aff 16(1):194–200
Darkwah F (2019) Health insurance, healthcare utilisation and labour market outcomes: a micro study of Ghana. A doctoral dissertation submitted to the University of Adelaide
Davis K, Collins SR, Doty MM, Ho A, Holmgren AL (2005) Health and productivity among US workers. Issue Brief (Commonw Fund) 856(856):1–10
Dizioli A, Pinheiro R (2016) Health insurance as a productive factor. Labour Econ 40:1–24
Erlangga D, Suhrcke M, Ali S, Bloor K (2019) The impact of public health insurance on health care utilisation, financial protection and health status in low-and middle-income countries: a systematic review. PLoS ONE 14(8):e0219731
Escobar ML, Griffin CC, Shaw RP (eds) (2011) The impact of health insurance in low-and middle-income countries. Brookings Institution Press, Washington
Gentry WM, Peress E (1994) Taxes and fringe benefits offered by employers (No. w4764). National Bureau of Economic Research, Cambridge
Gould E (2010) Employer-sponsored health insurance erosion accelerates in the recession, Economic Policy Institute Briefing Paper No. 283. https://www.epi.org/publication/bp283/ Accessed 10 May 2020
Greene WH (2000) Limited dependent variable and duration models. In: Greene WH (ed) Econometric analysis, 4th edn. Prentice-Hall, Upper Saddle River, pp 896–951
Grossman M (1972) On the concept of health capital and the demand for health. J Polit Econ 80(2):223–255
Gruber J, Poterba J (1994) Tax incentives and the decision to purchase health insurance: evidence from the self-employed. Q J Econ 109(3):701–733
Gruber J, Poterba JM (1996) Tax subsidies to employer-provided health insurance. Empirical foundations of household taxation. University of Chicago Press, Chicago, pp 135–168
Hadley J (2003) Sicker and poorer—the consequences of being uninsured: A review of the research on the relationship between health insurance, medical care use, health, work, and income. Med Care Res Rev 60(2_suppl):3S-75S
Holden L, Scuffham PA, Hilton MF, Ware RS, Vecchio N, Whiteford HA (2011) Health-related productivity losses increase when the health condition is co-morbid with psychological distress: findings from a large cross-sectional sample of working Australians. BMC Public Health 11(1):417
Institute of Medicine (2004) Insuring America’s health: principles and recommendations. National Academies Press, Washington
Johansson P, Palme M (2005) Moral hazard and sickness insurance. J Public Econ 89(9–10):1879–1890
Leigh JP (1986) Correlates of absence from work due to illness. Hum Relat 39(1):81–100
Lofland JH, Frick KD (2006) Effect of health insurance on workplace absenteeism in the US workforce. J Occup Environ Med 48(1):13–21
Marenzi A, Rizzi D, Zanette M (2021) Incentives for voluntary health insurance in a national health system: evidence from Italy. Health Policy. https://doi.org/10.1016/j.healthpol.2021.03.007
Mattke S, Balakrishnan A, Bergamo G, Newberry SJ (2007) A review of methods to measure health-related productivity loss. Am J Manag Care 13(4):211–217
Mello MM, Stearns SC, Norton EC (2002) Do medicare HMOs still reduce health services use after controlling for selection bias? Health Econ 11(4):323–340
Mitchell RJ, Bates P (2011) Measuring health-related productivity loss. Popul Health Manag 14(2):93–98
O’Brien E (2003) Employers’ benefits from workers’ health insurance. Milbank Q 81(1):5–43
Paringer L (1983) Women and absenteeism: health or economics? Am Econ Rev 73(2):123–127
Pauly MV (1997) Health benefits at work: an economic and political analysis of employment-based health insurance. University of Michigan Press, Ann Arbor
Pierre G, Sanchez PML, Valerio A, Rajadel T (2014) STEP skills measurement surveys: innovative tools for assessing skills. Discussion Paper 1421, World Bank
Rabbani A, Mehareen J, Chowdhury IA, Sarker M (2022) Mandatory employer-sponsored health financing scheme for semiformal workers in Bangladesh: an experimental assessment. Soc Sci Med 292:114590
Smith JP (1999) Healthy bodies and thick wallets: the dual relation between health and economic status. J Econ Perspect 13(2):145–166
Summers LH (1989) Some simple economics of mandated benefits. Am Econ Rev 79(2):177–183
Terza JV, Basu A, Rathouz PJ (2008) Two-stage residual inclusion estimation: addressing endogeneity in health econometric modeling. J Health Econ 27(3):531–543
Vistnes JP (1997) Gender differences in days lost from work due to illness. ILR Rev 50(2):304–323
Woodbury S, Huang WJ (1991) The tax treatment of fringe benefits. WE Upjohn Institute for Employment Research, Kalamazoo
Xu X, Jensen GA (2012) Does health insurance reduce illness-related worker absenteeism? Appl Econ 44(35):4591–4603
Funding
The authors declare that this research received no funding.
Author information
Authors and Affiliations
Contributions
The authors contributed equally to the development of the study. All authors read and approved the final manuscript.
Corresponding author
Ethics declarations
Conflict of interest
The authors declare that they have no conflict of interest.
Ethical approval
Not applicable.
Consent to participate
Not applicable.
Consent for publication
Not applicable.
Supplementary Information
Below is the link to the electronic supplementary material.
Rights and permissions
Springer Nature or its licensor holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Abdul Rahaman, W., Mohammed, I. & Baah-Boateng, W. Effect of employer-provided health insurance on illness-related absence from work. SN Soc Sci 2, 231 (2022). https://doi.org/10.1007/s43545-022-00539-w
Received:
Accepted:
Published:
DOI: https://doi.org/10.1007/s43545-022-00539-w
Keywords
- Work absence
- Illness-related absenteeism
- Productivity loss
- Employer-paid insurance
- Adverse selection
- Moral hazards