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4.2.2
The Residual State
One problem interpreting the analyses is that we lack information on the exit state for the
sick absent individuals with other exits than unemployment and receiving DB. We term
these states the residual state. A most reasonable assumption is that the vast majority of
those in the residual state who were employed at the start of the sick spell returned to
work. For the unemployed individuals the situation is different; for them, being in the
residual state is perhaps more likely associated with being out of the labor force. Since we
have information on yearly income from work in November 2008 we can test for
differences in labor force participation among the treated and controls. An individual with
a positive labor income in November is assumed to be working.
In November 2008, 54 percent of the employed were in this residuals state. Of these,
98 percent (both the S-treated and S-controls) were working. Among the unemployed, 23
percent were neither reported as sickness or disability benefit recipients, or as
unemployed. In this group, 73 percent had a reported income from work in 2008. This
indicates that a larger share of the unemployed had left the labor force; however, not
ending up in the disability benefit state. Furthermore, the share with a working income is
lower among the S-controls (67 percent) compared to the S-treated (80 percent). This
suggests that rather than staying on sick leave or receiving DB, the S-controls left the
labor force to, for example, collect welfare, be supported by their spouse, or pursue
higher education.
