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Work Absence in Europe

  • Leo Bonato
  • Lusine Lusinyan

Work absence is an important part of the individual decision on actual working hours. This paper focuses on sickness absence in Europe and develops a stylized model where absence is part of the labor-leisure decision made by workers and the production decision made by profit-maximizing firms, with insurance provisions and labor market institutions affecting the costs of absence. The results from a panel of 18 European countries indicate that absence is increased by generous insurance schemes where employers bear little responsibility for their costs. Shorter working hours reduce absence, but flexible working arrangements are preferable if labor supply erosion is a concern.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 04/193.

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Length: 44
Date of creation: 01 Oct 2004
Date of revision:
Handle: RePEc:imf:imfwpa:04/193
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  1. Katharine G. Abraham & Susan N. Houseman, 1995. "Labor Adjustment under Different Institutional Structures: A Case Study of Germany and the United States," Book chapters authored by Upjohn Institute researchers, in: Friedrich Buttler & Wolfgang Franz & Ronald Schettkat & David Soskice (ed.), Institutional Frameworks and Labor Market Performance: Comparative Views on the U.S. and German Economies, pages 285-315 W.E. Upjohn Institute for Employment Research.
  2. Peter Skogman Thoursie, 2004. "Reporting sick: are sporting events contagious?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(6), pages 809-823.
  3. Henrekson, Magnus & Persson, Mats, 2001. "The Effects on Sick Leave of Changes in the Sickness Insurance System," SSE/EFI Working Paper Series in Economics and Finance 0444, Stockholm School of Economics, revised 08 Aug 2001.
  4. Barmby, Tim A. & Ercolani, Marco G. & Treble, John G., 2000. "Sickness Absence: An International Comparison," IRISS Working Paper Series 2000-03, IRISS at CEPS/INSTEAD.
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  7. Anderson, T. W. & Hsiao, Cheng, 1982. "Formulation and estimation of dynamic models using panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 47-82, January.
  8. Edward C. Prescott, 2004. "Why Do Americans Work So Much More Than Europeans?," Levine's Bibliography 122247000000000413, UCLA Department of Economics.
  9. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  10. R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
  11. David M. Drukker, 2003. "Testing for serial correlation in linear panel-data models," Stata Journal, StataCorp LP, vol. 3(2), pages 168-177, June.
  12. Daniela Andrén, 2003. "Sickness-related Absenteeism and Economic Incentives in Sweden: A History of Reforms," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 1(3), pages 54-60, 02.
  13. Dunn, L F & Youngblood, Stuart A, 1986. "Absenteeism as a Mechanism for Approaching an Optimal Labor Market Equilibrium: An Empirical Study," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 668-74, November.
  14. Leigh, J. Paul, 1985. "The effects of unemployment and the business cycle on absenteeism," Journal of Economics and Business, Elsevier, vol. 37(2), pages 159-170, May.
  15. Arai, Mahmood & Skogman Thoursie, Peter, 2001. "Incentives and Selection in Cyclical Absenteeism," Working Paper Series 167, Trade Union Institute for Economic Research.
  16. Brown, Sarah & Sessions, John G, 1996. " The Economics of Absence: Theory and Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 10(1), pages 23-53, March.
  17. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
  18. Kaivanto, Kim, 1997. "An alternative model of pro-cyclical absenteeism," Economics Letters, Elsevier, vol. 54(1), pages 29-34, January.
  19. Johansson, Per & Palme, Marten, 1996. "Do economic incentives affect work absence? Empirical evidence using Swedish micro data," Journal of Public Economics, Elsevier, vol. 59(2), pages 195-218, February.
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