What should governments do about worker absence and sick pay? Governments have two roles to play, since they are employers themselves as well as being able to regulate. The last chapter dealt with the interests of employers generally, and applies equally to governments in their role as employers. This chapter deals with the regulatory role.

Why should governments intervene?

The discussion is guided by the idea, advanced in Chapter 4, that there is no obvious economic reason for government intervention in this market, which raises the question of what purpose the widespread adoption of state-regulated and -administered sick pay serves, and what its costs might be. Such schemes are almost universal in European economies. An important exception is the United Kingdom, where state intervention is minimal. At present, there is no sign of any widespread dissatisfaction with the sick pay that employers provide. In North America, too, there is little intervention, but there is considerable dissatisfaction with the system as it is, with a vocal movement for reform enjoying some success in encouraging city governments (notably that of San Francisco) to enact local legislation requiring employers to provide sick pay. On the other hand, the sick pay arrangements in place in Sweden have been the subject of a long and extensive debate on reform, with a number of reforms having being made in recent years.