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Compensation, safety, and absenteeism: Evidence from the paper industry

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  • Steven G. Allen
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    Abstract

    This paper develops an economic model of absenteeism and tests that model with data from a sample of establishments in the paper industry. Absenteeism is viewed as a desirable nonpecuniary element of the compensation package. The model, which is based upon the hedonic framework developed by Sherwin Rosen, focuses on the effects of wages, fringe benefits, and employment hazards on the long-run equilibrium absence rate of an establishment. The author finds that absence rates are significantly higher in paper plants with low wages and high occupational illness and injury rates, as predicted by the model. The impact of fringe benefits is less clear-cut both theoretically and empirically. The results suggest that work attendance plays an important part in labor market adjustment; studies that focus only on wage differences will underestimate the compensating differential for employment hazards, which includes increased absence rates as well as higher wages. (Abstract courtesy JSTOR.)

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    Bibliographic Info

    Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

    Volume (Year): 34 (1981)
    Issue (Month): 2 (January)
    Pages: 207-218

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    Handle: RePEc:ilr:articl:v:34:y:1981:i:2:p:207-218

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    Cited by:
    1. Coles, Melvyn G. & Treble, John G., 1996. "Calculating the price of worker reliability," Labour Economics, Elsevier, Elsevier, vol. 3(2), pages 169-188, September.
    2. Matthias Weiss, 2008. "Sick Leave and the Composition of Work Teams," MEA discussion paper series, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy 07149, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    3. Steven G. Allen & Robert L. Clark, 1987. "Pensions and Firm Performance," NBER Working Papers 2266, National Bureau of Economic Research, Inc.
    4. Matthew C. Farrelly & William N. Evans & Edward Montgomery, 1999. "Do Workplace Smoking Bans Reduce Smoking?," American Economic Review, American Economic Association, American Economic Association, vol. 89(4), pages 728-747, September.
    5. Cédric Afsa & Pauline Givord, 2014. "The impact of working conditions on sickness absence: a theoretical model and an empirical application to work schedules," Empirical Economics, Springer, Springer, vol. 46(1), pages 285-305, February.
    6. ZANARDELLI Mireille, 2011. "L'absentéisme au travail : une approche théorique qui intègre la survenance de la maladie comme un choc exogène," CEPS/INSTEAD Working Paper Series 2011-27, CEPS/INSTEAD.
    7. Fumio Ohtake, 2003. "Unions, the Costs of Job Loss, and Vacation," NBER Chapters, National Bureau of Economic Research, Inc, in: Labor Markets and Firm Benefit Policies in Japan and the United States, pages 371-390 National Bureau of Economic Research, Inc.
    8. Román, Francisco J., 2009. "An analysis of changes to a team-based incentive plan and its effects on productivity, product quality, and absenteeism," Accounting, Organizations and Society, Elsevier, vol. 34(5), pages 589-618, July.
    9. Kaiser, Carl P., 1998. "What do we know about employee absence behavior? An interdisciplinary interpretation," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, Elsevier, vol. 27(1), pages 79-96.
    10. Alex Bryson & Petri Böckerman & Pekka Ilmakunnas, 2011. "Does High Involvement Management Improve Worker Wellbeing?," CEP Discussion Papers, Centre for Economic Performance, LSE dp1095, Centre for Economic Performance, LSE.
    11. Lindgren, Karl-Oskar, 2012. "Workplace size and sickness absence transitions," Working Paper Series, IFAU - Institute for Evaluation of Labour Market and Education Policy 2012:26, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    12. Ose, Solveig Osborg, 2005. "Working conditions, compensation and absenteeism," Journal of Health Economics, Elsevier, Elsevier, vol. 24(1), pages 161-188, January.
    13. Leigh, J. Paul, 1995. "Smoking, self-selection and absenteeism," The Quarterly Review of Economics and Finance, Elsevier, Elsevier, vol. 35(4), pages 365-386.
    14. Johansson, Per & Palme, Marten, 1996. "Do economic incentives affect work absence? Empirical evidence using Swedish micro data," Journal of Public Economics, Elsevier, Elsevier, vol. 59(2), pages 195-218, February.
    15. D Cassidy & J Sutherland, 2008. "Going Absent, Then Just Going? A Case Study Examination of Absence and Quitting," Economic Issues Journal Articles, Economic Issues, Economic Issues, vol. 13(2), pages 1-20, September.
    16. Heywood, John S. & Jirjahn, Uwe & Wei, Xiangdong, 2008. "Teamwork, monitoring and absence," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 68(3-4), pages 676-690, December.
    17. Yaniv, Gideon, 1995. "Burnout, absenteeism, and the overtime decision," Journal of Economic Psychology, Elsevier, Elsevier, vol. 16(2), pages 297-309, July.

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