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Work Absence in Europe

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Author Info

  • Leo Bonato
  • Lusine Lusinyan

Abstract

Work absence is an important part of the individual decision on actual working hours. This paper focuses on sickness absence in Europe and develops a stylized model where absence is part of the labor-leisure decision made by workers and the production decision made by profit-maximizing firms, with insurance provisions and labor market institutions affecting the costs of absence. The results from a panel of 18 European countries indicate that absence is increased by generous insurance schemes where employers bear little responsibility for their costs. Shorter working hours reduce absence, but flexible working arrangements are preferable if labor supply erosion is a concern.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 04/193.

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Length: 44
Date of creation: 01 Oct 2004
Date of revision:
Handle: RePEc:imf:imfwpa:04/193

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Keywords: Sick leave; Labor supply; Data analysis; Data collection; Economic models; benefits; employment; unemployment; unemployed; sickness insurance; employment protection; wage; salary; unemployment insurance; salaries; worker; wages; labor force participation; unemployment benefit; compensation; unemployment benefits; labor force participation rate; part-time employment; labor demand; unemployment insurance system; unemployed persons; labor income; unemployment rate; early retirement; employment contract; unemployed person; public sector employment; minimum wage; labor force surveys; high unemployment; employment rates; effects on employment; gainful employment; equilibrium unemployment; effects of unemployment; sabbatical leave; self employed; public employment; high employment; employment equations; employment share; retirement age; low labor force participation; employment outlook; unemployment insurance systems; annual leave; compensation insurance; employed person; employment injury; rate of unemployment; paid leave; labor force characteristics;

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References

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  1. R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
  2. Brown, Sarah & Sessions, John G, 1996. " The Economics of Absence: Theory and Evidence," Journal of Economic Surveys, Wiley Blackwell, Wiley Blackwell, vol. 10(1), pages 23-53, March.
  3. Barmby, Tim A. & Ercolani, Marco G. & Treble, John G., 2000. "Sickness Absence: An International Comparison," IRISS Working Paper Series, IRISS at CEPS/INSTEAD 2000-03, IRISS at CEPS/INSTEAD.
  4. Skogman Thoursie, Peter, 2002. "Reporting Sick: Are Sporting Events Contagious?," Research Papers in Economics, Stockholm University, Department of Economics 2002:4, Stockholm University, Department of Economics.
  5. Susan N. Houseman & Katharine G. Abraham, 1993. "Labor Adjustment Under Different Institutional Structures: A Case Study of Germany and The United States," NBER Working Papers 4548, National Bureau of Economic Research, Inc.
  6. Arai, Mahmood & Skogman Thoursie, Peter, 2001. "Incentives and Selection in Cyclical Absenteeism," Working Paper Series, Trade Union Institute for Economic Research 167, Trade Union Institute for Economic Research.
  7. Edward C. Prescott, 2004. "Why do Americans Work so Much More than Europeans?," NBER Working Papers 10316, National Bureau of Economic Research, Inc.
  8. 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.
  9. Allen, Steven G, 1981. "An Empirical Model of Work Attendance," The Review of Economics and Statistics, MIT Press, vol. 63(1), pages 77-87, February.
  10. Kaivanto, Kim, 1997. "An alternative model of pro-cyclical absenteeism," Economics Letters, Elsevier, Elsevier, vol. 54(1), pages 29-34, January.
  11. David M. Drukker, 2003. "Testing for serial correlation in linear panel-data models," Stata Journal, StataCorp LP, StataCorp LP, vol. 3(2), pages 168-177, June.
  12. Judson, Ruth A. & Owen, Ann L., 1999. "Estimating dynamic panel data models: a guide for macroeconomists," Economics Letters, Elsevier, Elsevier, vol. 65(1), pages 9-15, October.
  13. Henrekson, Magnus & Persson, Mats, 2001. "The Effects on Sick Leave of Changes in the Sickness Insurance System," Working Paper Series in Economics and Finance 0444, Stockholm School of Economics, revised 08 Aug 2001.
  14. Daniela Andrén, 2003. "Sickness-related Absenteeism and Economic Incentives in Sweden: A History of Reforms," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, Ifo Institute for Economic Research at the University of Munich, vol. 1(3), pages 54-60, 02.
  15. Dunn, L F & Youngblood, Stuart A, 1986. "Absenteeism as a Mechanism for Approaching an Optimal Labor Market Equilibrium: An Empirical Study," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 668-74, November.
  16. Anderson, T. W. & Hsiao, Cheng, 1982. "Formulation and estimation of dynamic models using panel data," Journal of Econometrics, Elsevier, Elsevier, vol. 18(1), pages 47-82, January.
  17. Leigh, J. Paul, 1985. "The effects of unemployment and the business cycle on absenteeism," Journal of Economics and Business, Elsevier, Elsevier, vol. 37(2), pages 159-170, May.
  18. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  19. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, American Economic Association, vol. 74(3), pages 433-44, June.
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