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Job Security and Work Absence: Evidence from a Natural Experiment

Author

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  • Lindbeck, Assar

    () (Institute for International Economic Studies, Stockholm University)

  • Palme, Mårten

    () (Dept. of Economics, Stockholm University)

  • Persson, Mats

    () (Institute for International Economic Studies, Stockholm University)

Abstract

We analyze the consequences for sickness absence of a selective softening of job security legislation for small firms in Sweden in 2001. According to our differences-in-difference estimates, aggregate absence in these firms fell by 0.2-0.3 days per year. This aggregate net figure hides important effects on different groups of employees. Workers remaining in the reform firms after the reform reduced their absence by about one day. People with a high absence record tended to leave reform firms, but these firms also became less reluctant to hire people with a record of high absence.

Suggested Citation

  • Lindbeck, Assar & Palme, Mårten & Persson, Mats, 2006. "Job Security and Work Absence: Evidence from a Natural Experiment," Research Papers in Economics 2006:3, Stockholm University, Department of Economics.
  • Handle: RePEc:hhs:sunrpe:2006_0003
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    References listed on IDEAS

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    Cited by:

    1. Henrekson, Magnus & Johansson, Dan, 2010. "Firm Growth, Institutions and Structural Transformation," Working Paper Series 820, Research Institute of Industrial Economics.
    2. Vincenzo Scoppa & Daniela Vuri, 2014. "Absenteeism, unemployment and employment protection legislation: evidence from Italy," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-25, December.
    3. Steven J. Davis & Magnus Henrekson, 2006. "Economic Performance and Work Activity in Sweden after the Crisis of the Early 1990s," NBER Working Papers 12768, National Bureau of Economic Research, Inc.
    4. Nilsson, Martin, 2015. "Economic incentives and long-term sickness absence: the indirect effect of replacement rates on absence behavior," Working Paper Series 2015:17, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    5. Anders Bornhäll & Sven-Olov Daunfeldt & Niklas Rudholm, 2017. "Employment protection legislation and firm growth: evidence from a natural experiment," Industrial and Corporate Change, Oxford University Press, vol. 26(1), pages 169-185.
    6. Bjuggren, Carl Magnus, 2018. "Employment protection and labor productivity," Journal of Public Economics, Elsevier, vol. 157(C), pages 138-157.
    7. Steven J. Davis & Magnus Henrekson, 2010. "Economic Performance and Market Work Activity in Sweden After the Crisis of the Early 1990s," NBER Chapters,in: Reforming the Welfare State: Recovery and Beyond in Sweden, pages 225-252 National Bureau of Economic Research, Inc.
    8. Bratberg, Espen & Monstad, Karin, 2015. "Worried sick? Worker responses to a financial shock," Labour Economics, Elsevier, vol. 33(C), pages 111-120.
    9. Bratberg, Espen & Monstad, Karin, 2012. "Worried Sick? Worker Responses To Organizational Turmoil," Working Papers in Economics 08/12, University of Bergen, Department of Economics.
    10. Cristini, Annalisa & Origo, Federica & Pinoli, Sara, 2017. "The healthy fright of losing a good one for a bad one," Journal of Economic Psychology, Elsevier, vol. 59(C), pages 129-144.
    11. Ziebarth, Nicolas R., 2013. "Long-term absenteeism and moral hazard—Evidence from a natural experiment," Labour Economics, Elsevier, vol. 24(C), pages 277-292.
    12. Henningsen, Morten, 2008. "Benefit shifting: The case of sickness insurance for the unemployed," Labour Economics, Elsevier, vol. 15(6), pages 1238-1269, December.
    13. Olsson, Martin, 2009. "Employment protection and sickness absence," Labour Economics, Elsevier, vol. 16(2), pages 208-214, April.
    14. Markussen, Simen, 2009. "Closing the Gates? Evidence from a Natural Experiment on Physicians' Sickness Certification," Memorandum 19/2009, Oslo University, Department of Economics.
    15. Jahangir Khan & Clas Rehnberg, 2009. "Perceived job security and sickness absence: a study on moral hazard," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 10(4), pages 421-428, October.
    16. von Below, David & Thoursie, Peter Skogman, 2010. "Last in, first out?: Estimating the effect of seniority rules in Sweden," Labour Economics, Elsevier, vol. 17(6), pages 987-997, December.

    More about this item

    Keywords

    Seniority rules; sick pay insurance; firing costs; moral hazard;

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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