eprintid: 10543
rev_number: 13
eprint_status: archive
userid: 1
dir: disk0/00/01/05/43
datestamp: 2010-03-30 16:07:11
lastmod: 2016-01-10 07:53:52
status_changed: 2012-08-15 08:53:16
type: workingPaper
metadata_visibility: show
creators_name: Bauernschuster, Stefan
creators_name: Duersch, Peter
creators_name: Oechssler, Jörg
creators_name: Vadovic, Radovan
title: Mandatory Sick Pay Provision: A Labor Market Experiment
ispublished: pub
subjects: ddc-330
divisions: i-181000
keywords: sick pay , sick leave , experiment , gift exchange.
abstract: Sick-pay is a common provision in labor contracts. It insures workers against a sudden loss of income due to unexpected absences and helps them smooth consumption. Therefore, many governments find sick-pay socially desirable and choose to mandate its provision. But sick-pay is not without its problems. Not only it suffers from moral hazard but more importantly it is subject to a potentially serious adverse selection problem (higher sick-pay attracts sicker workers). In this paper we report results of an experiment which inquires to the extend and the severity of the adverse selection when sick-pay is voluntary versus when it is mandatory. Theoretically, mandating sick-pay may be effective in diminishing adverse selection. However, our data provide clean evidence that counteracting effects are more salient. Mandatory sick pay exacerbates moral hazard problems by changing fairness perceptions and, as a consequence, increases sick pay provision far above the mandatory levels.
abstract_translated_lang: eng
class_scheme: jel
class_labels: C9., C7, J3
date: 2010
date_type: published
id_scheme: DOI
id_number: 10.11588/heidok.00010543
schriftenreihe_cluster_id: sr-3
schriftenreihe_order: 0498
ppn_swb: 1648964613
own_urn: urn:nbn:de:bsz:16-opus-105430
language: eng
bibsort: BAUERNSCHUMANDATORYS2010
full_text_status: public
citation:   Bauernschuster, Stefan ; Duersch, Peter ; Oechssler, Jörg ; Vadovic, Radovan  (2010) Mandatory Sick Pay Provision: A Labor Market Experiment.  [Working paper]     
document_url: https://archiv.ub.uni-heidelberg.de/volltextserver/10543/1/Bauernschuster_2010_dp498.pdf