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

  • Christian Pfeifer


    (Leuphana University Lüneburg)

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 efficiencywage models. Personnel records of aGerman 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 Justus-Liebig University Giessen, Department of Statistics and Economics in its journal Journal of Economics and Statistics.

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
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  1. Richard Layard & Stephen Nickell, 1998. "Labour Market Institutions and Economic Performance," CEP Discussion Papers dp0407, Centre for Economic Performance, LSE.
  2. Lazear, Edward P, 1990. "Job Security Provisions and Employment," The Quarterly Journal of Economics, MIT Press, vol. 105(3), pages 699-726, August.
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  5. 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.
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