Does the onset of type 1 diabetes in young adults imply increased sickness absence? Results from a Swedish longitudinal study

Abstract: Few studies on sickness absence, theoretical as well as empirical, in the field of economics specifically focus on the impact of chronic illness. The purpose of the present study is to fill this theoretical gap by providing a theoretical explanation of sickness absence after the onset of a specific chronic illness, namely type 1 diabetes, but also to empirically examine if sickness absence differs for type 1 diabetics and a control group. The labour supply model of Brown and Session (1996), where health is incorporated in the utility function as an index of sickness, will be used to explain sickness absence in terms of labour-leisure trade-offs. The health capital model developed by Grossman (1972) is used to assess the effect of diabetes on optimal health and time allocation. The main conclusion from the theoretical discussion is that the onset of type 1 diabetes will alter preferences and behaviour. Diabetes is due to an increased mortality rate assumed to lower optimal health stock which will lead to more sick days in a given year in the health capital model. In the labour-leisure model this will increase the risk of sickness absence. Whether absence spells differ between diabetics and non-diabetics is examined with a data set containing type 1 diabetics diagnosed at age 15 to 34 years old, and a control group matched on age, sex and county of residence. These individuals are followed between 1993 and 2005. In the empirical analysis a hurdle model is employed. The empirical analysis show that type 1 diabetics are exposed to a sevenfold excess risk, ceteris paribus, of being absent compared to the control group. However, being stricken with diabetes does not increase the length of the spell.