Assessing the Effect of Economic Incentives on Incidence and Duration of Work Absence

The incidence and duration of work absence spells for a sample of Swedish blue collar workers in 1991 are analyzed using the Kaplan-Meier estimator, discrete time hazard regression as well as stratified Cox regression. The main interest is directed towards the effect of economic incentives. The effect of a decrease in the replacement level of the compulsory Swedish sickness insurance that took place in March 1991 is analyzed. The incidence of work absence spells decreases markedly after the reform, although no effects on the duration of the spell is found. Significant male-female differences are also found. The main results are robust to the different methods used