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Correlated Poisson Processes with Unobserved Heterogeneity: Estimating the Determinants of Paid and Unpaid Leave



Using linked employer-employee data from the Canadian Workplace and Employee Survey 1999-2004, we provide new evidence on how the cost of absence affects labor supply decisions. We use a particular feature of the data by which total absences are divided into three separate categories: sick paid days, other paid days and unpaid days. This division introduces variations in the way workers are compensated for absence (the cost of absence) and allows us to estimate more precisely how variations in such costs affect absenteeism decisions. We find an absence elasticity of -0.37. We also find unobserved heterogeneity to play different roles for workers and workplaces: some workers are more frequently absent whatever the reason, but paid and unpaid leaves are negatively correlated at the workplace level.

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  • Georges Dionne & Benoit Dostie, 2008. "Correlated Poisson Processes with Unobserved Heterogeneity: Estimating the Determinants of Paid and Unpaid Leave," Cahiers de recherche 08-07, HEC Montréal, Institut d'économie appliquée.
  • Handle: RePEc:iea:carech:0807

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    1. Andrea Ichino & Enrico Moretti, 2009. "Biological Gender Differences, Absenteeism, and the Earnings Gap," American Economic Journal: Applied Economics, American Economic Association, vol. 1(1), pages 183-218, January.
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    6. 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, March.
    7. John S. Heywood & Uwe Jirjahn, 2004. "Teams, Teamwork and Absence," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(4), pages 765-782, December.
    8. Per Johansson & Mårten Palme, 2002. "Assessing the Effect of Public Policy on Worker Absenteeism," Journal of Human Resources, University of Wisconsin Press, vol. 37(2), pages 381-409.
    9. Ose, Solveig Osborg, 2005. "Working conditions, compensation and absenteeism," Journal of Health Economics, Elsevier, vol. 24(1), pages 161-188, January.
    10. Heckman, James J & Walker, James R, 1990. "The Relationship between Wages and Income and the Timing and Spacing of Births: Evidence from Swedish Longitudinal Data," Econometrica, Econometric Society, vol. 58(6), pages 1411-1441, November.
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    12. Gourieroux, Christian & Monfort, Alain & Trognon, Alain, 1984. "Pseudo Maximum Likelihood Methods: Applications to Poisson Models," Econometrica, Econometric Society, vol. 52(3), pages 701-720, May.
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    14. 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.
    15. Barmby, Tim, 2002. "Worker absenteeism: a discrete hazard model with bivariate heterogeneity," Labour Economics, Elsevier, vol. 9(4), pages 469-476, September.
    16. Steven G. Allen, 1983. "How Much Does Absenteeism Cost?," Journal of Human Resources, University of Wisconsin Press, vol. 18(3), pages 379-393.
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    More about this item


    Absenteeism; Linked Employer-Employee Data; Unobserved Heterogeneity; Count Data Model; Correlated Random Effects;

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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