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The strength of the weakest link: sickness absence, internal substitutability and worker-firm matching

Author

Listed:
  • Hensvik, Lena

    (IFAU - Institute for Evaluation of Labour Market and Education Policy)

  • Rosenqvist, Olof

    (IFAU - Institute for Evaluation of Labour Market and Education Policy)

Abstract

We study how employee sickness absence affects worker-firm matching. We build on the idea that firms are sensitive to absence in jobs with few substitutes (unique positions). Consistent with this, we show that unique employees are less absent conditional on individual characteristics, establishment fixed effects and detailed occupational information. Half of this association is explained by sorting of low-absence workers into unique positions but sorting is less pronounced under imperfect information. Finally, job separations respond more to realized sickness absence in unique positions. The findings suggest that the cost of production disruptions is an important aspect of firms’ hiring choices.

Suggested Citation

  • 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.
    • Handle: RePEc:hhs:ifauwp:2015_028
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    References listed on IDEAS

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    1. Johansson, Gun & Orellana Pozo, Cecilia & Möller, Jette & Nordström, Karin, 2018. "Employment of people with a history of sickness absence," Working Paper Series 2018:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.

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    Keywords

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    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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