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Monetary incentives vs. monitoring in addressing absenteeism: experimental evidence

Author

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  • Francesco D'Amuri

    (Bank of Italy)

Abstract

Exploiting two unexpected variations in sickness absence policy for civil servants in Italy, this paper assesses the relative importance of monitoring and monetary incentives in determining a basic measure of effort: presence at work. When stricter monitoring was introduced together with an average 20% cut in replacement rates for civil servants on short sick leave, sickness absence decreased by 26.4%, eliminating the wedge in absence rates with comparable private sector workers. The impact substantially decreased when a subsequent policy change brought back monitoring to the pre-reform level, while leaving monetary incentives untouched. Results are confirmed by a variety of robustness checks and are not driven by the presence of attenuation bias. No shift is detected in other types of absence as a consequence of the reforms. Given that sickness absence rates are higher in the public than in the private sector in the US and Western Europe as well, these results provide useful insights on how to draw a successful strategy for addressing absenteeism.

Suggested Citation

  • Francesco D'Amuri, 2011. "Monetary incentives vs. monitoring in addressing absenteeism: experimental evidence," Temi di discussione (Economic working papers) 787, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:wptemi:td_787_11
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    File URL: http://www.bancaditalia.it/pubblicazioni/temi-discussione/2011/2011-0787/en_tema_787.pdf
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    References listed on IDEAS

    as
    1. Maria De Paola & Valeria Pupo & Vincenzo Scoppa, 2009. "Absenteeism In The Italian Public Sector: The Effects Of Changes In Sick Leave Compensation," Working Papers 200916, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. ¿Funcionarán las medidas contra el absentismo en el sector público?
      by Samuel Bentolila in Nada Es Gratis on 2012-05-22 11:00:37

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    Cited by:

    1. Hartman, Laura & Hesselius, Patrik & Johansson, Per, 2013. "Effects of eligibility screening in the sickness insurance: Evidence from a field experiment," Labour Economics, Elsevier, vol. 20(C), pages 48-56.

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    More about this item

    Keywords

    monetary incentives; monitoring; effort; sickness absence;
    All these keywords.

    JEL classification:

    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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