Effect of employer-provided health insurance on illness-related absence from work

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Abstract

Illness-related absence from work is a problem with disruptive consequences and several economic implications. As a result, ongoing research seeks to reduce this problem by examining the effect of health insurance on sickness absence. So far, the studies have tilted toward advanced countries with insufficient attention paid to employer-provided health insurance in developing countries. In this paper, we bridge this research gap by focusing on a Sub-Saharan African country to investigate whether employer-provided health insurance reduces the likelihood of sickness absence and the associated number of working days lost. Binary logistic regression and negative binomial regression techniques are applied to data from the World Bank’s Skills Toward Employment and Productivity (STEP) survey in Ghana. After addressing econometric issues relating to endogeneity and insurance-selection effects, the results show that employees who benefit from employer-provided insurance are less likely to report sickness absence from work and record fewer working days lost compared to their counterpart workers who self-finance their health insurance. These findings contribute insights from a developing country that employees can use as a bargaining tool and raison d'être for employers to sponsor health insurance for their workers. Policymakers can also advocate mandatory health insurance in workplaces based on these findings.

Original languageEnglish
Article number231
JournalSN Social Sciences
Volume2
Issue number10
DOIs
Publication statusPublished - Oct 2022

Keywords

  • Adverse selection
  • Employer-paid insurance
  • Illness-related absenteeism
  • Moral hazards
  • Productivity loss
  • Work absence

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