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Sick Over Sick Days: Taking Bad Economics to Another Level
Casey Mulligan at the NYT's Economix really pulls out all the stops. I'll let my colleague John Schmitt make the case:
Casey Mulligan Swings and Misses
University of Chicago economist Casey Mulligan has a post today at the New York Times Economix blog where he seems to argue that the current push for statutory paid sick days in the United States is ignoring the role of economic incentives. According to Mulligan, workers in countries with generous paid sick day policies stay home because of "incentives, and not the flu".
I don't think Mulligan has been following the U.S. debate on paid sick days very closely. The U.S. debate is very serious about incentives. The current system --which does not require employers to provide paid sick days and leaves upwards of 50 million workers without paid sick days-- gives strong incentives to workers to go to work sick, lowering productivity and potentially spreading illness.
Of course, offering paid sick days also gives workers incentives to take time off when they are not sick. But, there is nothing in Mulligan's post that says where we should set the optimal level. He doesn't even make a case that the most generous systems in Europe are too generous, just that they lead to more sickness absences in some cases. For all we know, after we factor in the cost of contagious diseases, the most generous European systems might still be too stingy.
To make his point about the effect of incentives, Mulligan features the following graph from a recent IMF paper:
Casey Mulligan graph on sickness absences
Mulligan, however, has made very selective use of the original IMF graph:
IMF graph on sickness absences
In the original, Denmark, Germany, and seven other countries with more generous statutory paid sick days policies all have lower sickness absence rates than the United States. A really interesting question is: how is it that these countries are able to provide both guaranteed paid sick days and lower sickness absence rates? (And why didn't Mulligan include these countries in his graph?)
Archived: October 28, 2009.
COMMENTS (11)
You have to check out the link, that Mulligan graph is so cherry picked it would make Dick Cheney proud.
I wonder if Mulligan would be willing to give up his sick days so that he doesn't incentivize his own sickness absences. After all it is pretty easy to argue against a benefit you enjoy, but that millions do not.
So I say spend a year without sick days, walk the walk, and then give us the non-theorized input on this issue.
Posted by: EndTheEcho | October 29, 2009 9:58 AM
I don't know what software you use for creating this page but it's junk. There are 112 warnings detected in the HTML. The graphs you wanted to embed are not there. There is, however an abnormal, erroneous "\ >" used to close the line break tag just before where each graph should go.
A debugger notes that this is labeled as HTML 4.01 Transitional but has so much non-standard weirdness that it is some sort of proprietary HTML.
And one reCapthca word below is so raggedy it could be "stored" or "stoned" so I can't tell if this will go through. You guys need IT help.
Posted by: Show the graphs | October 29, 2009 10:10 AM
Re: Show the graphs
I think the problem is your computer, i can see fine
Posted by: Andy | October 29, 2009 10:55 AM
Mulligan is guilty if grossly manipulative data presentation, aka fraud. Disgusting but not surprising.
It is interesting too that the original IMF paper, while presenting a host of useful data, doesn't adequately discuss the discrepancy in sickness rates between countries that have comparably high worker protection. The authors state on p. 481: "The sickness insurance systems are most
generous in the Nordic countries and Germany", but then go on to completely ignore the differences in sickness rates between Sweden and Norway (5%), and Germany and Denmark (1.5-2%). Also there is not a mention in the whole manuscript of the fact that the US, with the least generous protection for sick workers, is close to the average (3%), not to the bottom of the list of countries.
The authors do mention the interesting fact that a high labour participation rate implies higher rates of sickness absence.
Posted by: piglet | October 29, 2009 11:47 AM
I think there is a very important point that is left out here: Germany (and Europe in General) tends to have more vacation days. I am working in Germany at the moment, and have 30 vacation days. Keep in mind that is working days - so it is actually 6 weeks of vacation. So in the US, where vacation times are much shorter, there is much more incentive to take extra sick days.
Posted by: Aditya Savara | October 29, 2009 1:09 PM
Mulligan's argument style is fairly typical right-wing argument -- since sick days can possibly be misused, there shouldn't be any at all ! Just like the argument that "the minimum wage reduces jobs", "taxes cuts pay for themselves" or "tax increases will hurt the economy" [I want the economy to hurt as badly as the Clinton years] !
Good thing that Mulligan has tenure.
Posted by: H-Bob | October 29, 2009 1:14 PM
Mulligan introduces a new standard for moral hazard, the Mulligan Moral Hazard for workers who abuse sick pay.
Compare this, for example, to the moral hazard of oversupplying and overconsuming trillions in AIG credit-default swaps.
Mulligan is conducting a study to determine which hazard was worse, a small number of obscenely wealthy individuals wrecking the economy, or a large number of middle class workers weasling a few hours off on the job.
In either case, Mulligan will surely demonstrate that if only markets had been free, neither would be a problem.
Posted by: izzatzo | October 29, 2009 1:26 PM
Show the graphs said: There is, however an abnormal, erroneous "\ >" used to close the line break tag
I am assuming you mean the break tag that appears as
, not as you typed. This is standard XHTML. In fact, it is mandatory to specify breaks in such fashion.
Andy said: I think the problem is your computer, i can see fine
If this article is supposed to be showing graphs, it does not in any of the five browsers in which I tested it, all the most current releases. These are IE, Firefox, Opera, Safari and Chrome. This is all on Windows XP. Being a computer geek, a professional IT web application developer, it seems doubtful that I am doing something wrong. I am not sure you and I are looking at the same thing.
Posted by: Bill | October 29, 2009 8:54 PM
Every so often I have trouble with the link to the article. I go to the publication in question and find it there. Sometimes computer things just don't work, and you have to find a way around it. And there are two factors leading to sick time use in the US. The first, as Aditya Savara mentioned, is that people use sick time for vacation (known in HR as the "mental health day"). The second is that there is no help for parents with sick children. In the state sector, the people most likely to use all their sick time are single mothers with children.
And the Captcha spam reducer is damned irritating.
Posted by: PeonInChief | October 31, 2009 2:47 PM
Has anyone noticed that the countries with the highest sickness absent rates are the northern most countries with the least sun light during winter. This probably correlates cause and effect better than number of paid sick days. Sunny Greece comes in with the best attendance record.
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