Half the job is showing up: Returns to work, taxes, and sick leave choices.

摘要

I estimate how taxes affect sick leave behavior, one margin of labor supply. The opportunity cost of sick leave is lower when taxes are high since less after tax earnings are foregone. Aggregate sick leave behavior closely mirrors the pattern of average marginal tax rates. I find that sick leave responds to prices both on the intensive and extensive margins. Seventeen years of individual panel data allow me to estimate how sick leave responds to prices during a period of frequent tax reforms. I control for both current and permanent income as well as extensive demographic characteristics at the individual and household level. The responses to taxes are comparable to other labor supply estimates. The tax responses are only part of the explanation of sick leave behavior. The sick leave participation rate of a young cohort is 25% points higher than for a cohort born 20 years earlier, after controlling for individual characteristics and macro factors. I find evidence supporting specific mechanisms of social interactions in sick leave participation. The long run changes in behavior across cohorts together with evidence on attitudes and social interactions are consistent with changing social norms.