The Effect of Employment Protection on Worker Effort: A Comparison of Absenteeism During and After Probation
AbstractEmployment 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 worker effort. The goal of this paper is to fill in this gap and in particular to assess whether the provision of employment protection induces less effort among workers in the form of absenteeism. 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 days of absence per week more than doubles once employment protection is granted, thus confirming what is suggested by our theoretical model and what is typically assumed in the literature. We also discuss how this evidence can be used to estimate what the absenteeism rate would be in Italy if employment protection were eliminated.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 385.
Length: 22 pages
Date of creation: Oct 2001
Date of revision:
Publication status: published in: Journal of the European Economic Association, 2005, 3 (1), 120-143
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Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Other versions of this item:
- Andrea Ichino & Regina T. Riphahn, 2001. "The Effect of Employment Protection on Worker Effort. A Comparison of Absenteeism During and After Probation," CESifo Working Paper Series 596, CESifo Group Munich.
- Ichino, Andrea & Riphahn, Regina, 2003. "The Effect of Employment Protection on Worker Effort: A Comparison of Absenteeism During and After Probation," CEPR Discussion Papers 3847, C.E.P.R. Discussion Papers.
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-11-05 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Barmby, Tim & Stephan, Gesine, 2000. "Worker Absenteeism: Why Firm Size May Matter," Manchester School, University of Manchester, vol. 68(5), pages 568-77, September.
- Adriana D. Kugler, 1999.
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- Andrea Ichino & Giovanni Maggi, 1999.
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NBER Working Papers
7415, National Bureau of Economic Research, Inc.
- Andrea Ichino & Giovanni Maggi, 2000. "Work Environment And Individual Background: Explaining Regional Shirking Differentials In A Large Italian Firm," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 1057-1090, August.
- Ichino, Andrea & Maggi, Giovanni, 2000. "Work Environment And Individual Background: Explaining Regional Shirking Differentials In A Large Italian Firm," CEPR Discussion Papers 2387, C.E.P.R. Discussion Papers.
- Hopenhayn, Hugo & Rogerson, Richard, 1993. "Job Turnover and Policy Evaluation: A General Equilibrium Analysis," Journal of Political Economy, University of Chicago Press, vol. 101(5), pages 915-38, October.
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Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik),
Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 221(2), pages 179-201.
- Riphahn, Regina T. & Thalmaier, Anja, 1999. "Behavioral Effects of Probation Periods: An Analysis of Worker Absenteeism," IZA Discussion Papers 67, Institute for the Study of Labor (IZA).
- Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
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- Bertola, Giuseppe, 1990. "Job security, employment and wages," European Economic Review, Elsevier, vol. 34(4), pages 851-879, June.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Employment protection effects
by chris dillow in Stumbling and Mumbling on 2011-01-11 13:43:39
- ¿Funcionarán las medidas contra el absentismo en el sector público?
by Samuel Bentolila in Nada Es Gratis on 2012-05-22 06:00:37
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