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Worker Absenteeism in Search Equilibrium

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  • Engström, Per

    ()
    (Uppsala University)

  • Holmlund, Bertil

    ()
    (Uppsala University)

Abstract

The paper presents a general equilibrium model of search unemployment that incorporates absence from work as a distinct labor force state. Absenteeism is driven by random shocks to the value of leisure that are private information to the workers. Firms maximize profits while recognizing that the compensation package may affect the queue of job applicants and the absence rate. The analysis provides results concerning the effects of social insurance benefits and other determinants of workers’ and firms’ behavior. The normative anlysis identifies externalities associated with firm-provided sick pay and examines the welfare implications of alternative policies.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2947.

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Length: 36 pages
Date of creation: Jul 2007
Date of revision:
Publication status: published in: Scandinavian Journal of Economics, 2007, 109 (3), 439-467,
Handle: RePEc:iza:izadps:dp2947

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Keywords: unemployment; search; absenteeism; social insurance;

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References

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  1. Tim A. Barmby & Marco G. Ercolani & John G. Treble, 2002. "Sickness Absence: An International Comparison," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 112(480), pages F315-F331, June.
  2. Ichino, Andrea & Riphahn, Regina, 2003. "The Effect of Employment Protection on Worker Effort: A Comparison of Absenteeism During and After Probation," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3847, C.E.P.R. Discussion Papers.
  3. Hesselius, Patrik, 2003. "Does Sick Absence Increase the Risk of Unemployment?," Working Paper Series, Uppsala University, Department of Economics 2003:15, Uppsala University, Department of Economics.
  4. Barmby, T A & Orme, C D & Treble, John G, 1991. "Worker Absenteeism: An Analysis Using Microdata," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 101(405), pages 214-29, March.
  5. Barmby, Tim & Sessions, John G & Treble, John G, 1994. " Absenteeism, Efficiency Wages and Shirking," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 96(4), pages 561-66.
  6. Henrekson, Magnus & Persson, Mats, 2001. "The Effects on Sick Leave of Changes in the Sickness Insurance System," Working Paper Series in Economics and Finance, Stockholm School of Economics 0444, Stockholm School of Economics, revised 08 Aug 2001.
  7. Arai, Mahmood & Thoursie, Peter Skogman, 2005. "Incentives and selection in cyclical absenteeism," Labour Economics, Elsevier, Elsevier, vol. 12(2), pages 269-280, April.
  8. Bertil Holmlund, 2001. "Labor Taxation in Search Equilibrium with Home Production," CESifo Working Paper Series 462, CESifo Group Munich.
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  10. Coles, Melvyn G. & Treble, John G., 1996. "Calculating the price of worker reliability," Labour Economics, Elsevier, Elsevier, vol. 3(2), pages 169-188, September.
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  12. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262161877, December.
  13. James Costain, 1997. "Unemployment insurance with endogenous search intensity and precautionary saving," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 243, Department of Economics and Business, Universitat Pompeu Fabra.
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  15. Ehrenberg, Ronald G, 1970. "Absenteeism and the Overtime Decision," American Economic Review, American Economic Association, American Economic Association, vol. 60(3), pages 352-57, June.
  16. Holmlund, Bertil, 2004. "Sickness Absence and Search Unemployment," Working Paper Series, Uppsala University, Department of Economics 2004:6, Uppsala University, Department of Economics.
  17. 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.
  18. Andrea Ichino & Regina T. Riphahn, 2005. "The Effect of Employment Protection on Worker Effort: Absenteeism During and After Probation," Journal of the European Economic Association, MIT Press, MIT Press, vol. 3(1), pages 120-143, 03.
  19. Askildsen, Jan Erik & Bratberg, Espen & Nilsen, Øivind Anti, 2002. "Unemployment, Labour Force Composition and Sickness Absence: A Panel Data Study," IZA Discussion Papers 466, Institute for the Study of Labor (IZA).
  20. Johansson, Per & Palme, Mårten, 2001. "Assessing the effect of public policy on worker absenteeism," Working Paper Series, IFAU - Institute for Evaluation of Labour Market and Education Policy 2002:13, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  21. Krueger, Alan B. & Meyer, Bruce D., 2002. "Labor supply effects of social insurance," Handbook of Public Economics, Elsevier, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 33, pages 2327-2392 Elsevier.
  22. Flinn, C. & Heckman, J., 1982. "New methods for analyzing structural models of labor force dynamics," Journal of Econometrics, Elsevier, Elsevier, vol. 18(1), pages 115-168, January.
  23. 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.
  24. Toikka, Richard S, 1976. "A Markovian Model of Labor Market Decisions by Workers," American Economic Review, American Economic Association, American Economic Association, vol. 66(5), pages 821-34, December.
  25. Richard Rogerson & Robert Shimer & Randall Wright, 2004. "Search-Theoretic Models of the Labor Market-A Survey," NBER Working Papers 10655, National Bureau of Economic Research, Inc.
  26. Moen, E.R., 1995. "Competitive Search Equilibrium," Memorandum, Oslo University, Department of Economics 37/1995, Oslo University, Department of Economics.
  27. Monojit Chatterji & Colin J. Tilley, 2002. "Sickness, absenteeism, presenteeism, and sick pay," Oxford Economic Papers, Oxford University Press, vol. 54(4), pages 669-687, October.
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Citations

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Cited by:
  1. Assar Lindbeck & Mats Persson, 2013. "A continuous model of income insurance," International Tax and Public Finance, Springer, Springer, vol. 20(6), pages 938-960, December.
  2. Johansson, Fredrik & Klevmarken, Anders, 2006. "Explaining the size and nature of response in a survey on health status and economic standard," Working Paper Series, Uppsala University, Department of Economics 2006:2, Uppsala University, Department of Economics.
  3. Per Engström & Bertil Holmlund, 2006. "Tax Evasion and Self-Employment in a High-Tax Country: Evidence from Sweden," CESifo Working Paper Series 1736, CESifo Group Munich.
  4. Francoise Forges & Frederic Koessler, 2006. "Long Persuasion Games," THEMA Working Papers, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise 2006-01, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  5. Pouliakas, Konstantinos & Theodossiou, Ioannis, 2010. "An Inquiry into the Theory, Causes and Consequences of Monitoring Indicators of Health and Safety at Work," IZA Discussion Papers 4734, Institute for the Study of Labor (IZA).
  6. Pouliakas, Konstantinos & Theodossiou, Ioannis, 2010. "An Inquiry Into The Theory, Causes And Consequences Of Monitoring Indicators Of Health And Safety At Work," SIRE Discussion Papers, Scottish Institute for Research in Economics (SIRE) 2010-120, Scottish Institute for Research in Economics (SIRE).
  7. Pouliakas, Konstantinos & Theodoropoulos, Nikolaos, 2009. "Performance Pay as an Incentive for Lower Absence Rates in Britain," MPRA Paper 18238, University Library of Munich, Germany.
  8. Masaru Sasaki, 2010. "Unemployment and Workplace Safety in a Search and Matching Model," Discussion Papers in Economics and Business, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) 10-14, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  9. Jie Chen, 2006. "The Dynamics of Housing Allowance Claims in Sweden: A Discrete Time-Hazard Analysis," European Journal of Housing Policy, Taylor and Francis Journals, Taylor and Francis Journals, vol. 6(1), pages 1-29, April.
  10. Lechmann, Daniel S. J. & Schnabel, Claus, 2013. "Absence from Work of the Self-Employed: A Comparison with Paid Employees," IZA Discussion Papers 7756, Institute for the Study of Labor (IZA).

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