IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/62020.html
   My bibliography  Save this paper

A methodological proposal to evaluate the cost of duration moral hazard in workplace accident insurance

Author

Listed:
  • Martín-Román, Angel
  • Moral, Alfonso

Abstract

The cost of duration moral hazard in workplace accident insurance has been amply explored by North-American scholars in both the USA and Canada. Given the current context of financial constraints in public accounts and particularly in the Social Security system, we feel that the issue merits inquiry in the case of Spain. The present research also posits a methodological proposal using the econometric technique of stochastic frontiers, which allows us to break down the duration of work-related leave into what we term “economic days” and “medical days”. Our calculations indicate that during the seven-year period spanning 2005 to 2011, the cost of sick leave amongst full-time salaried workers amounted to 5,830 million Euros (in constant 2011 Euros). Of this total, and bearing in mind that “economic days” are those attributable to duration moral hazard, over 2,500 million Euros might be linked to workplace absenteeism. It is on this figure where economic policy measures might prove more effective.

Suggested Citation

  • Martín-Román, Angel & Moral, Alfonso, 2015. "A methodological proposal to evaluate the cost of duration moral hazard in workplace accident insurance," MPRA Paper 62020, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:62020
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/62020/1/MPRA_paper_62020.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stephen Whelan, 2010. "The Interaction between Income Support Programs," LABOUR, CEIS, vol. 24(4), pages 407-440, December.
    2. Meyer, Bruce D & Viscusi, W Kip & Durbin, David L, 1995. "Workers' Compensation and Injury Duration: Evidence from a Natural Experiment," American Economic Review, American Economic Association, vol. 85(3), pages 322-340, June.
    3. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-782, July.
    4. Nicolas R. Ziebarth & Martin Karlsson, 2014. "The Effects Of Expanding The Generosity Of The Statutory Sickness Insurance System," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 29(2), pages 208-230, March.
    5. repec:rel:journl:y:2008:v:5:n:1:p:1-34 is not listed on IDEAS
    6. Alan B. Krueger, 1990. "Workers' Compensation Insurance and the Duration of Workplace Injuries," NBER Working Papers 3253, National Bureau of Economic Research, Inc.
    7. Susser, Philip & Ziebarth, Nicolas R., 2016. "Profiling the US Sick Leave Landscape," IZA Discussion Papers 9709, Institute of Labor Economics (IZA).
    8. Greene, William H., 1980. "Maximum likelihood estimation of econometric frontier functions," Journal of Econometrics, Elsevier, vol. 13(1), pages 27-56, May.
    9. Ángel L. Martín-Román & Alfonso Moral, 2014. "Differences Between Spanish and Foreign Workers in the Duration of Workplace Accident Leave: A Stochastic Frontier Analysis," AIEL Series in Labour Economics, in: Miguel Ángel Malo & Dario Sciulli (ed.), Disadvantaged Workers, edition 127, chapter 0, pages 277-295, Springer.
    10. Boone, Jan & van Ours, Jan C., 2006. "Are recessions good for workplace safety?," Journal of Health Economics, Elsevier, vol. 25(6), pages 1069-1093, November.
    11. Guadalupe, Maria, 2003. "The hidden costs of fixed term contracts: the impact on work accidents," Labour Economics, Elsevier, vol. 10(3), pages 339-357, June.
    12. Stefan Pichler & Nicolas R. Ziebarth, 2015. "The Pros and Cons of Sick Pay Schemes: Testing for Contagious Presenteeism and Shirking Behavior," Discussion Papers of DIW Berlin 1509, DIW Berlin, German Institute for Economic Research.
    13. Ziebarth, Nicolas R. & Karlsson, Martin, 2010. "A natural experiment on sick pay cuts, sickness absence, and labor costs," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 1108-1122, December.
    14. Angel L. Martin-Roman & Alfonso Moral, 2014. "Differences between Spanish and Foreign Workers in the Duration of Workplace Accident Leave: A Stochastic Frontier Approach," AIEL Series in Labour Economics, in: Dario Sciulli & Miguel Ángel Malo (ed.), Disadvantaged Workers, edition 1, chapter 13, pages 277-295, AIEL - Associazione Italiana Economisti del Lavoro.
    15. Virginia Hernanz & Luis Toharia, 2006. "Do Temporary Contracts Increase Work Accidents? A Microeconometric Comparison between Italy and Spain," LABOUR, CEIS, vol. 20(3), pages 475-504, September.
    16. Puhani, Patrick A. & Sonderhof, Katja, 2010. "The effects of a sick pay reform on absence and on health-related outcomes," Journal of Health Economics, Elsevier, vol. 29(2), pages 285-302, March.
    17. Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
    18. Mark V. Pauly & Sean Nicholson & Judy Xu & Dan Polsky & Patricia M. Danzon & James F. Murray & Marc L. Berger, 2002. "A general model of the impact of absenteeism on employers and employees," Health Economics, John Wiley & Sons, Ltd., vol. 11(3), pages 221-231, April.
    19. repec:fth:prinin:261 is not listed on IDEAS
    20. Greene, William H., 1980. "On the estimation of a flexible frontier production model," Journal of Econometrics, Elsevier, vol. 13(1), pages 101-115, May.
    21. Andersen, Signe Hald, 2010. "The cost of sickness: On the effect of the duration of sick leave on post-sick leave earnings," Social Science & Medicine, Elsevier, vol. 70(10), pages 1581-1589, May.
    22. Johnson, William G & Ondrich, Jan, 1990. "The Duration of Post-injury Absences from Work," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 578-586, November.
    23. Miguel Ángel Malo & Dario Sciulli (ed.), 2014. "Disadvantaged Workers," AIEL Series in Labour Economics, Springer, edition 127, number 978-3-319-04376-0, December.
    24. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
    25. Catalina Amuedo-Dorantes, 2002. "Work Safety in the Context of Temporary Employment: The Spanish Experience," ILR Review, Cornell University, ILR School, vol. 55(2), pages 262-285, January.
    26. Butler, Richard J. & Hartwig, Robert P. & Gardner, Harold, 1997. "HMOs, moral hazard and cost shifting in workers' compensation," Journal of Health Economics, Elsevier, vol. 16(2), pages 191-206, April.
    27. Georges Dionne (ed.), 2013. "Handbook of Insurance," Springer Books, Springer, edition 2, number 978-1-4614-0155-1, June.
    28. Yong-Seung Park & Richard J. Butler, 2001. "The Safety Costs of Contingent Work: Evidence from Minnesota ," Journal of Labor Research, Transaction Publishers, vol. 22(4), pages 832-849, October.
    29. Xuguang (Steve) Guo & John F. Burton Jr., 2010. "Workers' Compensation: Recent Developments in Moral Hazard and Benefit Payments," ILR Review, Cornell University, ILR School, vol. 63(2), pages 340-355, January.
    30. Stevenson, Rodney E., 1980. "Likelihood functions for generalized stochastic frontier estimation," Journal of Econometrics, Elsevier, vol. 13(1), pages 57-66, May.
    31. Helena Corrales Herrero & Ángel L. Martín Román & Alfonso Moral de Blas, 2008. "La duración de las bajas por accidente laboral en España: ¿Se justifican las diferencias por comunidades autónomas?," Revista de Economía Laboral - Spanish Journal of Labour Economics, Asociación Española de Economía Laboral - AEET, vol. 5, pages 73-98.
    32. Michele Campolieti & Douglas E. Hyatt, 2006. "Further Evidence on the “Monday Effect†in Workers' Compensation," ILR Review, Cornell University, ILR School, vol. 59(3), pages 438-450, April.
    33. Martin-Roman Angel Luis & Moral Alfonso, 2016. "Moral Hazard in Monday Claim Filing: Evidence from Spanish Sick Leave Insurance," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(1), pages 437-476, January.
    34. Fortin, Bernard & Lanoie, Paul & Laporte, Christine, 1999. "Is Workers' Compensation a Substitute for Unemployment Insurance?," Journal of Risk and Uncertainty, Springer, vol. 18(2), pages 165-188, August.
    35. Stefan Pichler, 2015. "Sickness Absence, Moral Hazard, and the Business Cycle," Health Economics, John Wiley & Sons, Ltd., vol. 24(6), pages 692-710, June.
    36. Alan Krueger, 1990. "Worker's Compensation Insurance and the Duration of Workplace Injuries," Working Papers 641, Princeton University, Department of Economics, Industrial Relations Section..
    37. Leigh, J. Paul, 1985. "The effects of unemployment and the business cycle on absenteeism," Journal of Economics and Business, Elsevier, vol. 37(2), pages 159-170, May.
    38. Steven G. Allen, 1983. "How Much Does Absenteeism Cost?," Journal of Human Resources, University of Wisconsin Press, vol. 18(3), pages 379-393.
    39. Bernard Fortin & Paul Lanoie & Christine Laporte, 1996. "Unemployment Insurance and the Duration of Workplace Accidents," Canadian Journal of Economics, Canadian Economics Association, vol. 29(s1), pages 17-24, April.
    40. Newhouse, Joseph P., 1994. "Frontier estimation: How useful a tool for health economics?," Journal of Health Economics, Elsevier, vol. 13(3), pages 317-322, October.
    41. Butler, Richard J & Durbin, David L & Helvacian, Nurhan M, 1996. "Increasing Claims for Soft Tissue Injuries in Workers' Compensation: Cost Shifting and Moral Hazard," Journal of Risk and Uncertainty, Springer, vol. 13(1), pages 73-87, July.
    42. Leslie I. Boden & Monica Galizzi, 2003. "Income Losses of Women and Men Injured at Work," Journal of Human Resources, University of Wisconsin Press, vol. 38(3).
    43. Butler, Richard J & Worrall, John D, 1985. "Work Injury Compensation and the Duration of Nonwork Spells," Economic Journal, Royal Economic Society, vol. 95(379), pages 714-724, September.
    44. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    45. Paul Lanoie, 1992. "The Impact of Occupational Safety and Health Regulation on the Risk of Workplace Accidents: Quebec, 1983-87," Journal of Human Resources, University of Wisconsin Press, vol. 27(4), pages 643-660.
    46. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Delgado-Cubillo, Pablo & Martín-Román, Ángel L., 2023. "Workers’ behavior after safety regulations: Impact evaluation of the Spanish Occupational Safety and Health Act," MPRA Paper 117284, University Library of Munich, Germany.
    2. Ignacio Moral-Arce & Javier Martín-Román & Ángel L. Martín-Román, 2019. "Cessation of Activity Benefit for Spanish Self-employed Workers: A Heterogeneous Impact Evaluation," Hacienda Pública Española / Review of Public Economics, IEF, vol. 231(4), pages 41-79, December.
    3. María José Suárez & Cristina Muñiz, 2018. "Unobserved heterogeneity in work absence," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(8), pages 1137-1148, November.
    4. Ángel L. Martín-Román & Alfonso Moral & Sara Pinillos-Franco, 2024. "Are women breaking the glass ceiling? A gendered analysis of the duration of sick leave in Spain," International Journal of Health Economics and Management, Springer, vol. 24(1), pages 107-134, March.
    5. Maria Cervini-Pla & Judit Vall Castelló, 2018. "The earnings and employment losses before entering the disability system," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(8), pages 1111-1128, November.
    6. Martín-Román, Ángel L., 2022. "Beyond the added-worker and the discouraged-worker effects: the entitled-worker effect," Economic Modelling, Elsevier, vol. 110(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ángel L. Martín-Román & Alfonso Moral & Sara Pinillos-Franco, 2024. "Are women breaking the glass ceiling? A gendered analysis of the duration of sick leave in Spain," International Journal of Health Economics and Management, Springer, vol. 24(1), pages 107-134, March.
    2. Fortin, Bernard & Lanoie, Paul, 1998. "Effects of Workers' Compensation: A Survey," Cahiers de recherche 9816, Université Laval - Département d'économique.
    3. Sickles, Robin C. & Song, Wonho & Zelenyuk, Valentin, 2018. "Econometric Analysis of Productivity: Theory and Implementation in R," Working Papers 18-008, Rice University, Department of Economics.
    4. Bande, Roberto & López-Mourelo, Elva, 2014. "The spatial distribution of workplace accidents in Spain: assessing the role of workplace inspections," MPRA Paper 56767, University Library of Munich, Germany.
    5. Julio Peña & Julio Aguirre & René Cerca D'amico, 2004. "Pesca demersal en Chile: eficiencia técnica y escalas de operación," Revista de Analisis Economico – Economic Analysis Review, Universidad Alberto Hurtado/School of Economics and Business, vol. 19(1), pages 119-160, June.
    6. Konstantinos, Pouliakas & Ioannis, Theodossiou, 2010. "An Inquiry Into the Theory, Causes and Consequences of Monitoring Indicators of Health and Safety At Work," MPRA Paper 20336, University Library of Munich, Germany.
    7. Stefan Pichler & Nicolas R. Ziebarth, 2020. "Labor Market Effects of U.S. Sick Pay Mandates," Journal of Human Resources, University of Wisconsin Press, vol. 55(2), pages 611-659.
    8. Coelli, Tim J., 1995. "Recent Developments In Frontier Modelling And Efficiency Measurement," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 39(3), pages 1-27, December.
    9. Moral De Blas, Alfonso & Corrales-Herrero, Helena & Martín-Román, Ángel, 2012. "Glass Ceiling or Slippery Floors? Understanding Gender Differences in the Spanish Worker’s Compensation System/¿Techo de cristal o suelo resbaladizo? Comprendiendo las diferencias de género en el sist," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 30, pages 311-340, Abril.
    10. Dairo Estrada & Poldy Osorio, 2004. "Effects of Financial Capital on Colombian Banking Efficiency," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 22(47), pages 162-201, December.
    11. Massimo Del Gatto & Adriana Di Liberto & Carmelo Petraglia, 2011. "Measuring Productivity," Journal of Economic Surveys, Wiley Blackwell, vol. 25(5), pages 952-1008, December.
    12. Krueger, Alan B. & Meyer, Bruce D., 2002. "Labor supply effects of social insurance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 33, pages 2327-2392, Elsevier.
    13. Horrace, William C. & Rothbart, Michah W. & Yang, Yi, 2022. "Technical efficiency of public middle schools in New York City," Economics of Education Review, Elsevier, vol. 86(C).
    14. Luis R. Murillo‐Zamorano, 2004. "Economic Efficiency and Frontier Techniques," Journal of Economic Surveys, Wiley Blackwell, vol. 18(1), pages 33-77, February.
    15. John K M & Wayo Seini, 2013. "Technical Efficiency Analysis of Maize Farmers in the Eastern Region of Ghana," Journal of Social and Development Sciences, AMH International, vol. 4(2), pages 84-99.
    16. Ali M. Oumer & Amin Mugera & Michael Burton & Atakelty Hailu, 2022. "Technical efficiency and firm heterogeneity in stochastic frontier models: application to smallholder maize farms in Ethiopia," Journal of Productivity Analysis, Springer, vol. 57(2), pages 213-241, April.
    17. Galizzi, Monica & Boden, Leslie I., 2003. "The return to work of injured workers: evidence from matched unemployment insurance and workers' compensation data," Labour Economics, Elsevier, vol. 10(3), pages 311-337, June.
    18. Mustafa U. Karakaplan & Levent Kutlu, 2019. "School district consolidation policies: endogenous cost inefficiency and saving reversals," Empirical Economics, Springer, vol. 56(5), pages 1729-1768, May.
    19. Levent Kutlu & Shasha Liu & Robin C. Sickles, 2022. "Cost, Revenue, and Profit Function Estimates," Springer Books, in: Subhash C. Ray & Robert G. Chambers & Subal C. Kumbhakar (ed.), Handbook of Production Economics, chapter 16, pages 641-679, Springer.
    20. Massimiliano Piacenza, 2002. "Regulatory Constraints and Cost Efficiency of the Italian Public Transit Systems: An Exploratory Stochastic Frontier Model," CERIS Working Paper 200202, CNR-IRCrES Research Institute on Sustainable Economic Growth - Torino (TO) ITALY - former Institute for Economic Research on Firms and Growth - Moncalieri (TO) ITALY.

    More about this item

    Keywords

    workplace accident insurance; moral hazard; stochastic frontiers;
    All these keywords.

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:62020. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.