Social Interaction and Sickness Absence

It is today generally acknowledged that social norms are important for moral hazard in social insurance systems. In this paper we study whether local variation in sickness absence can be explained by local variation in norms concerning benefit dependency – formed by social interaction on the neighborhood level. A well known methodological problem in analyses of this issue is how to disentangle the effects of individual sorting from the causal effects of group absence behavior on individual behavior. We use four different empirical approaches to deal with this issue. Each relies on an identifying assumption, which can be questioned. Still, all approaches separately indicate that the variation in the data is consistent with the hypothesis that social norms and group behavior are important for individual sickness absence. JEL Code H56, I38, J22, Z13