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The Healthy Fright of Losing a Good One for a Bad One

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Author Info

  • Cristini, Annalisa

    ()
    (University of Bergamo)

  • Origo, Federica

    ()
    (University of Bergamo)

  • Pinoli, Sara

    ()
    (University of Bergamo)

Abstract

In this paper we study the effect of different degrees of employment protection on absenteeism, paying attention to differences between workers moving from protected jobs to insecure jobs, on the one hand, and workers moving from insecure to secure jobs, on the other hand. Using a large representative sample of Italian workers, we show that workers' reaction in terms of sickness leave is not symmetric: losing protection (bad news) is more effective than gaining it (good news). We claim that this asymmetry is consistent with the behavior of financial markets responding to good and bad news. In our case, workers react in a more prudential way to improvements in their employment status ("wait and see" strategy), while they do immediately adjust to worsening job security by showing off healthy behavior.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6348.

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Length: 18 pages
Date of creation: Feb 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6348

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Keywords: absenteeism; employment protection; delayed reaction;

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References

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  1. Scoppa, Vincenzo, 2008. "Worker Absenteeism and Incentives: Evidence from Italy," MPRA Paper 16858, University Library of Munich, Germany.
  2. 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, Econometric Society 60, Econometric Society.
  3. 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.
  4. Johansson, Per & Palme, Marten, 2005. "Moral hazard and sickness insurance," Journal of Public Economics, Elsevier, Elsevier, vol. 89(9-10), pages 1879-1890, September.
  5. Olsson, Martin, 2009. "Employment protection and sickness absence," Labour Economics, Elsevier, Elsevier, vol. 16(2), pages 208-214, April.
  6. Barmby, Tim & Orme, Chris D & Treble, John, 1990. "Worker Absenteeism: An Analysis Using Microdata," CEPR Discussion Papers, C.E.P.R. Discussion Papers 434, C.E.P.R. Discussion Papers.
  7. Hesselius, Patrik, 2007. "Does sickness absence increase the risk of unemployment?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, Elsevier, vol. 36(2), pages 288-310, April.
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Cited by:
  1. Scoppa, Vincenzo & Vuri, Daniela, 2012. "Absenteeism, Unemployment and Employment Protection Legislation: Evidence from Italy," IZA Discussion Papers 7091, Institute for the Study of Labor (IZA).

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