The purpose of the paper is to examine whether the variations in sickness absence can be explained by economic variables. A basic economic behavioural model is set up in section I which draws attention to the incentives and disincentives for claiming benefit. The model is then estimated using time series and family structure data. The empirical results of this paper lend tentative support to the 'disincentive' hypothesis. In two of the models tested (time series and family structure) it appeared that the relative generosity of National Insurance benefits had some effect on the level of certified incapacity for work. In addition, the time series model supports the related view that job security influences decisions about sickness absence just as strongly as direct financial incentives. There was some suggestion that certified incapacity was affected by incomes but the results were rather weak. These results can be interpreted in different ways. A cynical view is that they provide evidence of 'social security scroungers'. Thus high levels of benefit in relation to income, general prosperity and low unemployment tend to encourage malingering. However, in order to give general credibility to this explanation one must suggest that administrative controls and medical certification are ineffective in filtering out those who are fit for work. Undoubtedly, people do get through the net. The classical example is the 'bad back' which does not exhibit any easily observable medical symptoms. Furthermore, the concept of incapacity is subjective and whilst there may be a core of broad agreement amongst doctors there is bound to be some fuzziness at the edges. However, whether a sufficient number of people could slip through the controls to explain the range of variation displayed in incapacity statistics must be questionable. The alternative interpretation does not lead us to question the adequacy of the certification process as a filtering device but does cast doubt on whether people are receiving proper treatment for actual incapacity. Rest at home or in hospital forms part of a pattern of treatment for certain diseases, injuries or conditions. But like other economic goods, the level of demand depends upon price, income and other factors. What might be happening is that during recession workers cannot afford time off work unless they are quite seriously ill. Consequently increases in the relative level of social security benefits have simply permitted workers to undertake proper treatment as prescribed by their physicians.
