Lohnfortzahlung und Krankenstand

Abstract Sickness benefit income reduces an employee’s opportunity costs of absence from work. In the Federal Republic of Germany the institutional arrangement was changed several times during the 1951-1999 period. This paper investigates the effects on sick leave behavior. According to the empirical analysis, moral hazard is a serious problem in Germany. The paper discusses some institutional changes (including compulsory private insurance for the employed) which probably would reduce moral hazard significantly.