Employees in the United Kingdom who are sick for at least four days in a row are
Question:
Employees in the United Kingdom who are sick for at least four days in a row are entitled to statutory sick leave of \(£ 89.35\) per week for up to 28 weeks. Sick leave is paid by employers and is a taxable benefit (GOV.UK). As no amount is payable for the first three qualifying days, the average employee who is off sick for one week receives a statutory sick leave entitlement of under \(9 \%\) of normal salary. (Of course, companies with sick-pay schemes would provide more.) In contrast, workers are paid \(100 \%\) of their salary for at least a month in, for example, Luxembourg, Germany, Austria, Belgium, and Norway. Not surprisingly, the rate of absence from work for reasons of sickness is relatively low in Britain (The Telegraph, 2016). Evaluate the efficiency and welfare implications of these different sick-leave policies, taking account of externalities.
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