The determinants of sick leave durations of Dutch self-employed

Abstract

This paper analyzes sickness absenteeism among self-employed in the Netherlands. Using a unique data set provided by a large Dutch private insurance company, we assess the determinants of sick leave durations. Our study suggests that several risk factors affect the sick leave durations of self-employed in a similar way as they influence the absence spells of employees according to the literature. For example, the recovery rate decreases with age and claimants suffering from psychological diseases have a lower recovery rate relative to claimants with other disorders. Furthermore, the sick leave durations of self-employed last longer when the economy is booming. In contrast to what the literature generally documents for employees, we do not find any evidence for moral hazard effects with respect to the benefit compensation level. Moreover, the absence spells of self-employed last longer in periods of high unemployment, whereas the opposite effect is usually documented for employees. We do not establish any significant gender differences in the sick leave durations of self-employed. Contract-specific factors such as insurance brand and deferment period are typical characteristics of insurance contracts for self-employed and play an important role in explaining their sick leave durations. Finally, the introduction of insurer-based case management significantly increased the recovery rate of self-employed with an ongoing spell up to 1 year. By contrast, case management did not succeed in improving the recovery rate of claimants trapped in long-term sickness absence.