A methodological proposal to evaluate the cost of duration moral hazard in workplace accident insurance

Abstract

The cost of duration moral hazard in workplace accident insurance has been amply explored by North-American scholars. Given the current context of financial constraints in public accounts, and particularly in the Social Security system, we feel that the issue merits inquiry in the case of Spain. The present research posits a methodological proposal using the econometric technique of stochastic frontiers, which allows us to break down the duration of work-related leave into what we term ‘‘economic days’’ and ‘‘medical days’’. Our calculations indicate that during the 9-year period spanning 2005–2013, the cost of sick leave amongst full-time salaried workers amounted to 6920 million Euros (in constant 2011 Euros). Of this total, and bearing in mind that ‘‘economic days’’ are those attributable to duration moral hazard, over 3000 million Euros might be linked to workplace absenteeism. It is on this figure where economic policy measures might prove more effective.