Employment interruptions due to sick leave in the context of socio-political institutions

Abstract

"In Germany, 45.0 % of all days of sick leave can meanwhile be attributed to long-term diseases (Knieps & Pfaff, 2017). These diseases can have severe consequences for employees: Besides the physical or psychical impairment due to the disease itself, a long employment interruption due to sick leave involves income losses, depreciation of human capital and an increased risk of dismissal (Hultin et al., 2012). Socio-political institutions such as dismissal protection or continued payment of wages in case of sickness are to reduce these negative effects. For persons who are not in the scope of application of the institutions, a long employment interruption due to sick leave may therefore have even more severe effects on their further employment history. The contribution analyses to what extent the institution of the German concept of continued payment of wages in case of sickness influences the incidence and duration of long-term diseases. It is assumed that the disease behaviour can partly also be attributed to individual decisions. Anticipated lack of job security - in the form of non-existing or weak dismissal protection - may therefore result in the fact that persons try to avoid or delay long employment interruption due to sick leave for fear of dismissal. For the empirical analysis, a reform from 2004 which relaxed the dismissal protection is used as a natural experiment. As part of the reform, the threshold for the company size at which the general dismissal protection becomes effective was increased from five to ten full-time equivalent employees. In a difference-in-difference approach, the causal effects of dismissal protection on the incidence and duration of long phases of sick leave are estimated. The analyses are based on the biography data of selected social insurance agencies in Germany (Biographiedaten ausgewählter Sozialversicherungsträger in Deutschland, BASiD). This is an administrative record that combines individual data from Deutsche Rentenversicherung and the Federal Employment Agency so that information on pension and employment-relevant phases is collected. In order to calculate the company size, company information is added to the record. Initial results indicate that the persons affected by the reform have a lower probability of entering into an employment interruption due to sick leave two years after joining the company. The duration of the phases of sick leave seems not to be affected by the reform." (Author's abstract, IAB-Doku) ((en))

Cite article

Hiesinger, K. (2018): Krankheitsbedingte Erwerbsunterbrechungen im Kontext sozialpolitischer Institutionen. In: Bayern in Zahlen, Vol. 149, No. 9, p. 602-603.