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Sick leave has important implications for worker well-being, productivity, and public health. This study develops a behavioural framework in which workers exert effort to obtain medical certification, linking economic incentives to observed sick leave behaviour. The model formalizes how unobserved search effort affects the probability of obtaining certified leave and generates testable predictions on the roles of health, wages, job security, and labour market conditions. Using nationally representative panel data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, we estimate pooled cross-sectional, individual fixed effects, and Hausman – Taylor models to account for unobserved heterogeneity and potential endogeneity. The results indicate that poor health and permanent employment are associated with higher levels of sick leave, while higher unemployment risk is associated with reduced leave-taking. Wage effects appear to operate through interactions, with higher wages linked to greater sick leave among workers in unfavourable health and those in more secure employment. Gender differences are consistently observed, with men taking fewer sick leave days than women, while unemployment benefits show no statistically significant association. The findings suggest that sick leave reflects both health needs and economic incentives, highlighting the importance of policies that enable appropriate leave-taking without penalizing vulnerable workers.
Kong et al. (Fri,) studied this question.