Part-Time Sick Leave as a Treatment Method?

Daniela Andrn and Thomas Andrn Gteborg University Department of Economics at the School of Business, Economics and Law

Background
Part-time sick leave existed since the beginning of the 1960s Due to the increase in sick leave during the end of the 1990s, the Swedish government has set out in 2001 a program that aims to reduce sick leave by 50% by the year 2008. part-time sick leave

The aim of the paper

to answer this question whether the use of part-time sick leave would help the government to fulfill its 2008 goal HOW? analyzing the effects of part-time sick leave on the probability of recovering before a given point in time

Why this paper

Earlier work on sickness absenteeism: RFV 2000-2004. Part-time sick leave (50%) since 1960s Pilot study during 1988-89: PTSL (25% & 75%) in some municipalities 25% & 75% since July 1990 Very few papers on this issue (most of them using only descriptive statistics) But many hypotheses and high expectations

The institutional settings (I)

a person who did not lose more than 75% of their work capacity: can be on sick leave part-time and work part-time. The decision for the type of sick leave (FT/PT) is mainly made on the doctor evaluation of the patient health status. Afterwards, there is the social insurance office that decides if the individual is untitled to compensation, and what type (i.e. 25%, 50%, 75% or 100%). In most of the cases, this decision is overlapping the doctor suggestion after the medical evaluation of the patient.

The institutional settings (II)

Other factors not all diagnoses are suitable for part-time. not all jobs are suitable for employees on PT. Diagnosis x Job: Even though, the are some diagnoses (e.g., musculoskeletal and mental disorders) for which PTSL is a reasonable alternative, it might be that the work situation of the patient does not allow for such solution. Economic incentives No official upper limit of the sick leave.

Empirical specification
The point of departure is a switching regression model with an endogenous switch (Heckman, 1978 1979) between two potential states. A natural extension: is to specify an output equation for each state, allowing the coefficients to differ between the two states of nature, which in this case is PTSL & FTSL.

The model
Y1* = X1 + U1
Y0* = X 0 + U 0
D * = Z D + U D

Y1 = 1 if Y1* 0, Y1 = 0 elsewhere
(Part-time sick leave) (1)

Y0 = 1 if Y0* 0, Y0 = 0 elsewhere
(Full-time sick leave) (2)

D = 1 if D * 0, D = 0 elsewhere
(Selection rule) (3)

A one factor structure

U1 = 1 + 1
U 0 = 0 + 0

U D = + D
( , 1 , 0 , D ) ~ N (0, ) (U1 ,U 0 ,U D ) ~ N (0, ),
12 10 1D 1 + 12 1 0 1 D 2 2 = 1 + 0 0 D 0 0D = 2 2 D

Assumptions
(X , Z)
(Y1 , Y0 ) ( D | X , Z , )
Pr(Yi | Di , X i , i ) = Pr(Yi | X i , i )
The probability to choose a state

The likelihood function

L = Pr( Di , Yi | X i , Z i , i )dF ( i )
i =1 N N

= Pr( Di | Z i , i ) Pr(Yi | Di , X i , i )dF ( i )

i =1

Treatment parameters
ATE ( X , Z ) = [ ( X1 + 1 ) ( X 0 + 0 )]dF ( )

Z D TT ( X , Z , D = 1) = D

[( X

+ 1 ) ( X 0 + 0 )] ( Z D + D ) dF ( )

DATA
the 2002 sample of the RFV-LS database of the Swedish Social Insurance Agency of Sweden. exact dates when sickness spells began and ended states before and after sickness (work, education, unemployment, temporary or permanent disability, etc.). sickness history the year before information about individual characteristics, the job, the social insurance, and the type of doctor. 5000 persons benefits 3607 employees without SB/ER

The distribution of sickness cases by type of sick leave

Sick-leave degree in the beginning and at the end of the sickness spell Full-time, full-time Full-time, part-time Part-time, full-time Part-time, part-time On part-time sick leave (%) any time in the beginning

All n=3607 0.715 0.180 0.019 0.085 0.285 0.104

Censored n=419 0.563 0.260 0.036 0.141 0.437 0.177

Recovered N=2953 0.745 0.166 0.016 0.073 0.255 0.089

Not recovered n=235 0.609 0.221 0.034 0.136 0.391 0.170

Mean and median duration of sickness spells by type of sick leave

Sick-leave degree in the beginning and at the end of the sickness spell Full-time, full-time Full-time, part-time Part-time, full-time Part-time, part-time t-test pt10 vs. pt11 pt01 vs. pt11 pt00 vs. pt11

All n=3607 mean median 85.5 33.0 156.1 101.0 172.8 125.0 148.1 83.0 12.8 5.4 7.5

Recovered n=2953 mean median 49.6 28.0 103.3 81.0 100.0 85.0 80.5 59.0 15.0 5.6 6.4

Not recovered n=235 mean median 142.4 84.0 172.9 165.5 203.8 248.5 167.5 125.5 1.5 1.2 0.9

Results
The selection into part-time/full-time sick leave the estimated parameters do not change very much

The output equations factor loadings and most of the estimated parameters change sign & magnitude. the changes are relatively bigger for the PT compared to FT equation

Treatment effect of part-time sick leave

ATE 0.6

TT

0.4

0.2

0 30 -0.2 60 90 120 240 300 360

-0.4

-0.6

-0.8 Days on sick leave

......................................................

Thank you for your attention

More questions and critics are very welcome