Long-term sick leave and the impact of a graded return-to-work program: evidence from Germany

The implementation of a graded return-to-work (RTW) program to reintegrate the long-term sick started in Germany in 1971 and has been manifested in the Social Code Book V since 1989. Based on a return plan by the physician and the insured, participants increase their working hours slowly over a specified period of time. As participants are still classified as incapable of working they still receive sick leave benefits. Using claims data from the Techniker Krankenkasse, the largest German sickness fund, the study aims at identifying participants and analyzing the full return-to-work and the impact of the RTW program. Thereby, we account for socio-economic factors, insurance-based characteristics, and medical and health-related information. We consider a possible selection bias by using individual weights to analyze determinants of length of the sickness absence by applying models for survival analysis (Cox proportional hazard model). As a main result - depending on the central assumption of unconfoundedness - sickness absence is positively related to participation in the RTW program for those with sickness absence longer than 120 days. For mental disorders, our results indicate an even stronger effect. The study results emphasize the need further promotion of this instrument among those insured, physicians and employers, as occupational health management is one key for a successful return-to-work.