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Compensation, Safety, and Absenteeism: Evidence from the Paper Industry

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  • Steven G. Allen

Abstract

This paper develops an economic model of absenteeism and tests that model with data from a sample of establishments in the paper industry. Absenteeism is viewed as a desirable nonpecuniary element of the compensation package. The model, which is based upon the hedonic framework developed by Sherwin Rosen, focuses on the effects of wages, fringe benefits, and employment hazards on the long-run equilibrium absence rate of an establishment. The author finds that absence rates are significantly higher in paper plants with low wages and high occupational illness and injury rates, as predicted by the model. The impact of fringe benefits is less clear-cut both theoretically and empirically. The results suggest that work attendance plays an important part in labor market adjustment; studies that focus only on wage differences will underestimate the compensating differential for employment hazards, which includes increased absence rates as well as higher wages.

Suggested Citation

  • Steven G. Allen, 1981. "Compensation, Safety, and Absenteeism: Evidence from the Paper Industry," ILR Review, Cornell University, ILR School, vol. 34(2), pages 207-218, January.
    • Handle: RePEc:sae:ilrrev:v:34:y:1981:i:2:p:207-218
    DOI: 10.1177/001979398103400203
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    Cited by:

    1. Tor Eriksson & Nicolai Kristensen, 2014. "Wages or Fringes? Some Evidence on Trade-Offs and Sorting," Journal of Labor Economics, University of Chicago Press, vol. 32(4), pages 899-928.
    2. Steven G. Allen & Robert L. Clark, 1987. "Pensions and Firm Performance," NBER Working Papers 2266, National Bureau of Economic Research, Inc.
    3. Cédric Afsa & Pauline Givord, 2014. "The impact of working conditions on sickness absence: a theoretical model and an empirical application to work schedules," Empirical Economics, Springer, vol. 46(1), pages 285-305, February.
    4. John S. Heywood & Laurie A. Miller, 2015. "Schedule Flexibility, Family Friendly Policies and Absence," Manchester School, University of Manchester, vol. 83(6), pages 652-675, December.
    5. Böckerman, Petri & Ilmakunnas, Pekka, 2008. "Interaction of working conditions, job satisfaction, and sickness absences: Evidence from a representative sample of employees," Social Science & Medicine, Elsevier, vol. 67(4), pages 520-528, August.
    6. Ilias Livanos & Alexandros Zangelidis, 2013. "Unemployment, Labor Market Flexibility, and Absenteeism: A Pan-European Study," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 52(2), pages 492-515, April.
    7. Miguel A. Delgado & Thomas J. Kniesner, 1997. "Count Data Models With Variance Of Unknown Form: An Application To A Hedonic Model Of Worker Absenteeism," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 41-49, February.
    8. Fumio Ohtake, 2003. "Unions, the Costs of Job Loss, and Vacation," NBER Chapters, in: Labor Markets and Firm Benefit Policies in Japan and the United States, pages 371-390, National Bureau of Economic Research, Inc.
    9. Riphahn Regina T. & Thalmaier Anja, 2001. "Behavioral Effects of Probation Periods: An Analysis of Worker Absenteeism / Anreizeffekte der Probezeit: Eine Untersuchung von Fehlzeiten bei Arbeitnehmern," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 221(2), pages 179-201, April.
    10. Carmen GARCÍA OLAVERRI & Emilio HUERTA, 2011. "Trade union influence in Spanish manufacturing firms," International Labour Review, International Labour Organization, vol. 150(3-4), pages 279-296, December.
    11. Hensvik, Lena & Rosenqvist, Olof, 2015. "The strength of the weakest link: sickness absence, internal substitutability and worker-firm matching," Working Paper Series 2015:28, IFAU - Institute for Evaluation of Labour Market and Education Policy.

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