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The Effect of Employment Protection on Worker Effort: A Comparison of Absenteeism During and After Probation

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Author Info
Ichino, Andrea
Riphahn, Regina

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Abstract

Employment protection systems are known to generate significant distortions in firms’ hiring and firing decisions. We know much less about the impact of these regulations on workers behaviour. The goal of this Paper is to fill in this gap and in particular to assess whether the provision of employment protection induces more absenteeism among workers. Our analysis is based on weekly observations for the 858 white-collar workers hired by a large Italian bank between January 1993 and February 1995. These workers begin to be protected against firing only after the twelfth week of tenure and we observe them for one year. We show that the number of day’s absence per week more than doubles once employment protection is granted. This result offers a preliminary but robust piece of evidence to evaluate a consequence of employment protection systems that has been relatively neglected in the policy debate in Europe.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3847.

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Date of creation: Mar 2003
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Handle: RePEc:cpr:ceprdp:3847

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Keywords: absenteeism employment protection probation worker effort

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Find related papers by JEL classification:
J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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  1. Engellandt, Axel & Riphahn, Regina T., 2004. "Incentive Effects of Bonus Payments: Evidence from an International Company," IZA Discussion Papers 1229, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Bertil Holmlund, 2004. "Sickness Absence and Search Unemployment," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
    Other versions:
  3. Kjell Erik Lommerud & Odd Rune Straume, 2007. "Technology resistance and globalisation with trade unions: the choice between employment protection and flexicurity," NIPE Working Papers 25/2007, NIPE - Universidade do Minho. [Downloadable!]
  4. Steve Bradley & Colin Green & Gareth Leeves, 2007. "Employment contracts and effort: why do temporary workers take less absence?," Working Papers 005102, Lancaster University Management School, Economics Department. [Downloadable!]
  5. Engellandt, Axel & Riphahn, Regina T., 2003. "Temporary Contracts and Employee Effort," IZA Discussion Papers 780, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  6. Assar Lindbeck & Marten Palme & Mats Persson, 2006. "Job Security and Work Absence: Evidence from a Natural Experiment," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
    Other versions:
  7. Andrea Ichino & Gerd Muehlheusser, 2003. "How often should you open the door? Optimal monitoring to screen heterogeneous agents," Diskussionsschriften dp0319, Universitaet Bern, Departement Volkswirtschaft. [Downloadable!]
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  8. Beissinger, Thomas, 2001. "The Impact of Labor Market Reforms on Capital Flows, Wages and Unemployment," IZA Discussion Papers 390, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  9. Ichino, Andrea & Moretti, Enrico, 2006. "Biological Gender Differences, Absenteeism and the Earning Gap," CEPR Discussion Papers 5785, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  10. Lindbeck, Assar, 2003. "Improving the Performance of the European Social Model - The Welfare State over the Life Cycle," Working Paper Series 587, Research Institute of Industrial Economics. [Downloadable!]
    Other versions:
  11. Peter Rühmann & Jens Südekum, 2001. "Severance Payments and Firm-Specific Human Capital," Departmental Discussion Papers 111, University of Goettingen, Department of Economics. [Downloadable!]
    Other versions:
  12. Lindbeck, Assar & Palme, Mårten & Persson, Mats, 2006. "Job Security and Work Avbsence: Evidence form a Natural Experiment," Seminar Papers 743, Stockholm University, Institute for International Economic Studies. [Downloadable!]
  13. Per Engström & Bertil Holmlund, 2005. "Worker Absenteeism in Search Equilibrium," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
    Other versions:
  14. Wolter Hassink & Pierre Koning, 2005. "Do Financial Bonuses to Employees Reduce their Absenteeism? Outcome of a Lottery," Working Papers 05-27, Utrecht School of Economics. [Downloadable!]
    Other versions:
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