Tag Archives: labor

Activation against absenteeism – Evidence from a sickness insurance reform in Norway, published in Journal of Health Economics Volume 62, November 2018, Pages 60-68

Or why you should take courses that are not for credit and do presentations in class.

In the spring of 2015, I followed a course in microeconometrics at the Department of Economics at the University of Oslo to learn some more econometrics. As part of the course, the students had to present published papers employing the methods from the course. I volunteered to do two such presentations, that both ended up as papers of my own!

For my first presentation, which was on the synthetic control method (SCM), I asked the instructor for that lecture, Tarjei Havnes, if I in stead could present an application of my own. I did not know much about the SCM from before, but in the lecture I noticed that it would fit very well to a recent sickness absence reform in a Norwegian region I had head about from Knut Røed, a colleague at the Frisch Centre. The fact that the seminar schedule was on a few weeks lag from the lectures gave me some time to implement a basic analysis of the reform and put together a presentation. The subsequent positive feedback in the seminar motivated me to develop it into a proper paper, which is now just published in the Journal of Health Economics. The paper if of course much extended since that seminar, but the core remained the same.

The reform in question was a program undertaken by the Norwegian region of Hedmark in 2013. It was aimed at strictly enforcing a requirement that people on long-term sick leave be partly back at work unless explicitly defined as an exception. I found that the reform reduced sickness absenteeism by 12% in the reform region compared to a comparison unit created by a weighted average of similar regions. Thus, making use of the partial work capacity of temporary disabled workers has the potential to reduce long-term absenteeism and bring down social security costs. 

A key graph is below, showing how actual absenteeism in Hedmark (solid line) after the reform diverged from the estimate of absenteeism in the absence of reform (dashed line): 

Fig. 1. Trends in the sickness absence rate in Hedmark and the synthetic control region. Note: The dotted line at the fourth quarter of 2011 indicates the final quarter of the matching period. The dashed line at the second quarter of 2013 indicates the period in which the activation program was introduced.

    The effect is driven by both increased part-time presence of temporary disabled workers and accelerated recovery. Musculoskeletal disorders was the diagnosis group declining the most. I conclude that such an activation strategy represents an alternative to traditional attempts at welfare reform involving stricter screening or reductions in generosity, and may be more compatible with already existing legislation and obligations, as well as easier to find support for across political priorities.

    The paper is freely available for a month here.

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    Can Welfare Conditionality Combat High School Dropout? Forthcoming in Labour Economics

    Two years ago, I blogged about a working paper on conditions for welfare and high school completion by Simen Markussen, Knut Røed and myself. The paper is now finally accepted for publication and is forthcoming in Labour Economics. The final version is here, freely downloadable until the beginning of October. An updated working paper version can be found here.

    Childhood predictors of adult outcomes

    Two papers in The Economic Journal November 2014 deal with how childhood information may predict adult outcomes.

    Frijters, Johnston and Shields consider the question Does Childhood Predict Adult Life Satisfaction? Using repeated surveys of people born in the UK in 1958, they are able to explain only 7 % of people’s adult life satisfaction with a very wide range of family and childhood variables. Interestingly, exploiting the panel dimension, they estimate that around 40 % of adult life satisfaction is a trait (i.e. fixed), so it is surprising that their first number is so low. It is as if type of childhood almost does not matter. Education and wages are predicted much better.

    I do not know if information on time preferences would have helped, but Golsteyn, Grönqvist and Lindahl at least claim that Adolescent Time Preferences Predict Lifetime Outcomes in their article in the same issue. They find that Swedes who were future-oriented (had low discount rates) as children went on to obtain more education, better grades, higher incomes, and better health (obesity and mortality) as adults than their more impatient peers. The authors are admirably clear that they are not estimating causal effects.

    The effect of football on work motivation and well-being

    “Is soccer good for you? The motivational impact of big sporting events on the unemployed” is an article in Economic Letters (ungated) by Philipp Doerrenberg and Sebastian Siegloch at IZA that I believe a lot of people wished they had written. The authors analyze the effect of the Euro Cup and the World Cup on the unemployed in Germany:

    We examine the effect of salient international soccer tournaments on the motivation of unemployed individuals to search for employment using the German Socio Economic Panel 1984–2010. Exploiting the random scheduling of survey interviews […] We show that respondents who are interviewed after a tournament have an increased motivation to work but, at the same time, request higher reservation wages. Furthermore, the sporting events increase the perceived health status as well as worries about the general economic situation. We also find effects on the subjective well-being of men.

    The unemployed are made more motivated to work and more worried, and to perceive themselves as being healthier, but men’s well-being is decreased. Ht: Kevin Lewis.