Hostname: page-component-cd9895bd7-jn8rn Total loading time: 0 Render date: 2024-12-29T05:33:02.590Z Has data issue: false hasContentIssue false
  • English
  • Français

A Tale of Two Continents: Insuring Workers Against Loss of Income Due to Sickness in North America and Europe

Published online by Cambridge University Press:  26 March 2020

John Treble
John Treble*
Affiliation:
Swansea University
*
e-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

Sick pay has been debated recently in several economies, including the US, Germany and Sweden. There is, however, little academic discussion of the nature of sick pay, or of how it should be structured. This paper clears the ground for such a discussion in two ways; it identifies a conceptual difference between the North American model, rooted in job protection, and the European model, which is predominantly a form of social insurance. Secondly, it argues that experience-rated sick pay provided by employers avoids the classical problems of insurance markets. US-style paid sick leave is an example of such a scheme.

Keywords

Sick paysick leavemoral hazardadverse selectionoptimal insuranceoptimal sortingJ3J32J33J38
Type
Articles
Information
National Institute Economic Review , Volume 209 , July 2009 , pp. 116 - 125
Copyright
Copyright © 2009 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

∗

Many conversations have contributed facts and arguments to this paper. Tim Barmby, Melvyn Coles, Rado Vadovic and Denise Drummond have made many useful suggestions. Ron Oaxaca first piqued my interest in the US institutions. Even a short conversation with Richard Freeman is enough to put things into a new perspective. Price Fishback should bear joint responsibility for footnote 3, but I hereby absolve him and anyone else for any errors that may appear here.

References

Barmby, T.A., Orme, C.D. and Treble, J.G. (1991), ‘Worker absenteeism: an analysis using microdata’, Economic Journal, 101 (405), March, pp. 214–29.CrossRefGoogle Scholar
Bauer, H. (1996), Probability Theory, Berlin and New York, SAGE Publications.CrossRefGoogle Scholar
Carter, S.B., Gartner, S.S., Haines, M.R., Olmstead, A.L., Sutch, R. and Wright, G. (2006), Historical Statistics of the United States: Millennial Edition, Cambridge, Cambridge University Press.Google Scholar
Coles, M.G. and Treble, J.G. (1993), ‘The price of worker reliability’, Economics Letters, 41, pp. 149–55.CrossRefGoogle Scholar
-(1996), ‘Calculating the cost of absenteeism’, Labour Economics, 3, pp. 169–88.Google Scholar
Connolly, M. (2008), ‘Here comes the rain again: weather and the intertemporal substitution of leisure’, Journal of Labor Economics, 26, 1, pp. 73–100.CrossRefGoogle Scholar
Cooper, R. and Hayes, B. (1987), ‘Multi-period insurance contracts’, International Journal of Industrial Organization, 5, pp. 211–31.CrossRefGoogle Scholar
Dilnot, A., Kay, J. and Morris, C. (1984), The Reform of Social Security, Oxford, Oxford University Press.Google Scholar
Dionne, G. and Lasserre, P. (1985), ‘Adverse selection, repeated insurance contracts and announcement strategy’, Review of Economic Studies, LII, pp. 719–23.CrossRefGoogle Scholar
-(1987), ‘Adverse selection and finite-horizon insurance contracts’, European Economic Review, 31 pp. 843–61.Google Scholar
Engström, P. and Holmlund, B. (2007), ‘Worker absenteeism in search equilibrium’, Scandinavian Journal of Economics, 109(3), pp. 439–67.CrossRefGoogle Scholar
Guerin, L. and England, D.C. (2007), The Essential Guide to Family and Medical Leave, Berkeley, California, Nolo.Google Scholar
Lanfranchi, J. and Treble, J.G. (2009), ‘Just-in-time production, work organisation and absenteeism control’, Manchester School (forthcoming).Google Scholar
Maistrov, L.E. (1974), Probability Theory: A Historical Sketch, New York and London, Academic Press.Google Scholar
Malueg, D.A. (1988), ‘Repeated insurance contracts with differential learning’, Review of Economic Studies, LV, pp. 177–81.CrossRefGoogle Scholar
Mikhalev, V. (1996), ‘Social security in Russia under economic transformation’, Europe-Asia Studies, 48(1), pp. 5–25.CrossRefGoogle Scholar
Murray, J.E. (2007), Origins of American Health Insurance: A History of Industrial Sickness Funds, Hew Haven and London, Yale University Press.Google Scholar
Radner, R. (1981), ‘Monitoring cooperative agreements in a repeated principal-agent relationship’, Econometrica, 49(5), pp. 1127–48.CrossRefGoogle Scholar
Rothschild, M. (1976), ‘Searching for the lowest price when the distribution of prices is unknown’, Journal of Political Economy, 82, 4, pp. 689–711.CrossRefGoogle Scholar
Thoursie, P.S. (2004), ‘Reporting sick: are sporting events contagious?’, Journal of Applied Economics, 19, pp. 809–23.Google Scholar
Timmins, N. (2001), The Five Giants (2nd ed.), Fontana.Google Scholar