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Work Effort During and After Employment Probation: Evidence from German Personnel Data

Author Info

Listed author(s):
  • Pfeifer Christian

    ()

    (Institute of Economics, Leuphana University Lüneburg, Scharnhorststr. 1, 21335 Lüneburg, Germany, and IZA Bonn)

Abstract

The degree of employment protection affects employment flows as well as work effort of employees. Whereas the former aspect has been analysed in many studies, the impact of employment protection on work effort has been analysed in few recent studies. Theory predicts that employment protection reduces work effort because employee shirking cannot be that easily punished by the firm, which decreases the separation probability and increases the expected utility for a shirker in efficiency wage models. Personnel records of a German company are used to assess the impact of lower employment protection during probation on worker absenteeism as a proxy for work effort. The main finding is that new white-collar workers are on average more than 50 percent less likely to be absent and have on average more than 60 percent fewer absent working days during the three months probation period compared to the nine months period afterwards. These relative effects differ only slightly between the genders and between different age and educational groups.

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Article provided by De Gruyter in its journal Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik).

Volume (Year): 230 (2010)
Issue (Month): 1 (February)
Pages: 77-91

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Handle: RePEc:jns:jbstat:v:230:y:2010:i:1:p:77-91
Contact details of provider: Web page: https://www.degruyter.com

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Keywords: Absenteeism; employment protection; probation; work effort;

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  1. 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).
  2. Riphahn, Regina T., 2004. "Employment protection and effort among German employees," Economics Letters, Elsevier, vol. 85(3), pages 353-357, December.
  3. Nickell, Stephen & Layard, Richard, 1999. "Labor market institutions and economic performance," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 46, pages 3029-3084 Elsevier.
  4. Engellandt, Axel & Riphahn, Regina T., 2005. "Temporary contracts and employee effort," Labour Economics, Elsevier, vol. 12(3), pages 281-299, June.
  5. Edward P. Lazear, 1990. "Job Security Provisions and Employment," The Quarterly Journal of Economics, Oxford University Press, vol. 105(3), pages 699-726.
  6. Angrist, Joshua D, 2001. "Estimations of Limited Dependent Variable Models with Dummy Endogenous Regressors: Simple Strategies for Empirical Practice," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(1), pages 2-16, January.
  7. 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, vol. 3(1), pages 120-143, 03.
  8. Rigmar Osterkamp & Oliver Röhn, 2007. "Being on Sick Leave: Possible Explanations for Differences of Sick-leave Days Across Countries," CESifo Economic Studies, CESifo, vol. 53(1), pages 97-114, March.
  9. Barmby, Tim & Sessions, John G & Treble, John G, 1994. " Absenteeism, Efficiency Wages and Shirking," Scandinavian Journal of Economics, Wiley Blackwell, vol. 96(4), pages 561-566.
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Cited by:

  1. Christian Pfeifer, 2014. "Base Salaries, Bonus Payments, and Work Absence among Managers in a German Company," Scottish Journal of Political Economy, Scottish Economic Society, vol. 61(5), pages 523-536, November.
  2. Verardi Vincenzo & Wagner Joachim, 2011. "Robust Estimation of Linear Fixed Effects Panel Data Models with an Application to the Exporter Productivity Premium," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 231(4), pages 546-557, August.

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