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

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

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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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Paper
- Ichino, Andrea & Riphahn, Regina T., 2001. "The Effect of Employment Protection on Worker Effort. A Comparison of Absenteeism During and After Probation," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
- Ichino, Andrea & Riphahn, Regina T., 2001. "The Effect of Employment Protection on Worker Effort: A Comparison of Absenteeism During and After Probation," IZA Discussion Papers 385, Institute for the Study of Labor (IZA). [Downloadable!]

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

This paper has been announced in the following NEP Reports:

NEP-LAB-2003-07-13 (Labour Economics)

Cited by:
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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!]
Bertil Holmlund, 2004. "Sickness Absence and Search Unemployment," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
Other versions:
- Holmlund, Bertil, 2004. "Sickness Absence and Search Unemployment," Working Paper Series 2004:6, Uppsala University, Department of Economics. [Downloadable!]
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!]
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!]
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:
- Engellandt, Axel & Riphahn, Regina, 2004. "Temporary Contracts and Employee Effort," CEPR Discussion Papers 4178, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Engellandt, Axel & Riphahn, Regina T., 2005. "Temporary contracts and employee effort," Labour Economics, Elsevier, vol. 12(3), pages 281-299, June. [Downloadable!] (restricted)
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:
- Lindbeck, Assar & Palme, Mårten & Persson, Mats, 2006. "Job Security and Work Absence: Evidence from a Natural Experiment," Working Paper Series 660, Research Institute of Industrial Economics. [Downloadable!]
- Lindbeck, Assar & Palme, Mårten & Persson, Mats, 2006. "Job Security and Work Absence: Evidence from a Natural Experiment," Research Papers in Economics 2006:3, Stockholm University, Department of Economics. [Downloadable!]
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!]
Other versions:
- Ichino, Andrea & Muehlheusser, Gerd, 2004. "How Often Should you Open the Door? Optimal Monitoring to Screen Heterogeneous Agents," CEPR Discussion Papers 4255, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Ichino, Andrea & Muehlheusser, Gerd, 2004. "How Often Should You Open the Door? Optimal Monitoring to Screen Heterogeneous Agents," IZA Discussion Papers 987, Institute for the Study of Labor (IZA). [Downloadable!]
- Gerd Muehlheusser & Andrea Ichino, 2004. "How often should you open the door? Optimal monitoring to screen heterogeneous agents," Econometric Society 2004 North American Summer Meetings 60, Econometric Society. [Downloadable!]
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:
- Beissinger, Thomas, 2002. "The Impact of Labor Market Reforms on Capital Flows, Wages and Unemployment," Royal Economic Society Annual Conference 2002 18, Royal Economic Society. [Downloadable!]
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)
Other versions:
- Andrea Ichino & Enrico Moretti, 2006. "Biological Gender Differences, Absenteeism and the Earning Gap," IZA Discussion Papers 2207, Institute for the Study of Labor (IZA). [Downloadable!]
- Andrea Ichino & Enrico Moretti, 2006. "Biological Gender Differences, Absenteeism and the Earning Gap," NBER Working Papers 12369, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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:
- Lindbeck, Assar, 2003. "Improving the Performance of the European Social Model - The Welfare State over the Life Cycle," Seminar Papers 717, Stockholm University, Institute for International Economic Studies. [Downloadable!]
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:
- Jens Suedekum & Peter Ruehmann, 2003. "Severance Payments and Firm-specific Human Capital," LABOUR, CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd, vol. 17(1), pages 47-62, 03. [Downloadable!] (restricted)
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!]
Per Engström & Bertil Holmlund, 2005. "Worker Absenteeism in Search Equilibrium," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
Other versions:
- Engström, Per & Holmlund, Bertil, 2005. "Worker Absenteeism in Search Equilibrium," Working Paper Series 2005:22, Uppsala University, Department of Economics. [Downloadable!]
- Per Engström & Bertil Holmlund, 2007. "Worker Absenteeism in Search Equilibrium," IZA Discussion Papers 2947, Institute for the Study of Labor (IZA). [Downloadable!]
- Per Engström & Bertil Holmlund, 2007. "Worker Absenteeism in Search Equilibrium," Scandinavian Journal of Economics, Blackwell Publishing, vol. 109(3), pages 439-467, 09. [Downloadable!] (restricted)
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:
- Wolter Hassink & Pierre Koning, 2005. "Do Financial Bonuses to Employees Reduce Their Absenteeism? Outcome of a Lottery," IZA Discussion Papers 1644, Institute for the Study of Labor (IZA). [Downloadable!]

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