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Work Absence in Europe

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  • Leo Bonato
  • Lusine Lusinyan

Abstract

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.

Suggested Citation

  • Leo Bonato & Lusine Lusinyan, 2004. "Work Absence in Europe," IMF Working Papers 04/193, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:04/193
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    References listed on IDEAS

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    Keywords

    Europe; Social insurance; Insurance; sickness absence; working time; panel data; benefits; employment; unemployment; unemployed; sickness insurance; Time Allocation and Labor Supply;

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