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The Impact of Sickness Absenteeism on Productivity: New Evidence from Belgian Matched Panel Data

Author

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  • Grinza, Elena

    (University of Milan)

  • Rycx, François

    (Free University of Brussels)

Abstract

We investigate the impact of sickness absenteeism on productivity by using rich longitudinal matched employer-employee data on Belgian private firms. We deal with endogeneity, which arises from unobserved firm heterogeneity and reverse causality, by applying a modified version of the Ackerberg et al's (2015) control function method, which explicitly removes firm fixed effects. Our main finding is that, in general, sickness absenteeism substantially dampens firm productivity. An increase of 1 percentage point in the rate of sickness absenteeism entails a productivity loss of 0.24%. Yet, we find that the impact is much diversified depending on the categories of workers who are absent and across different types of firms. Our results show that sickness absenteeism is detrimental mainly when absent workers are high-tenure or blue-collar workers. Moreover, they show that sickness absenteeism is harmful mostly to industrial firms, high capital-intensive companies, and small- and medium-sized enterprises. This overall picture is coherent with the idea that sickness absenteeism is problematic when absent workers embed high levels of firm/task-specific (tacit) knowledge, when the work of absent employees is highly interconnected with the work of other employees (e.g., along the assembly line), and when firms face more limitations in substituting temporarily absent workers.

Suggested Citation

  • Grinza, Elena & Rycx, François, 2018. "The Impact of Sickness Absenteeism on Productivity: New Evidence from Belgian Matched Panel Data," IZA Discussion Papers 11543, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp11543
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    Cited by:

    1. J. I. Gimenez-Nadal & J. A. Molina & J. Velilla, 2022. "Commuting time and sickness absence of US workers," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 49(3), pages 691-719, August.
    2. Echeverría, Lucía & Gimenez-Nadal, J. Ignacio & Molina, José Alberto, 2022. "Active Commuting and the Health of Workers," IZA Discussion Papers 15572, Institute of Labor Economics (IZA).
    3. Giménez-Nadal, José Ignacio & Molina, José Alberto & Velilla, Jorge, 2022. "Trends in commuting time of European workers: A cross-country analysis," Transport Policy, Elsevier, vol. 116(C), pages 327-342.
    4. Pål Børing, 2019. "The relationship between firm productivity, firm size and CSR objectives for innovations," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 9(3), pages 269-297, September.
    5. Gimenez-Nadal, J. Ignacio & Molina, José Alberto & Velilla, Jorge, 2018. "Commuting Time and Sick-Day Absence of US Workers," IZA Discussion Papers 11700, Institute of Labor Economics (IZA).
    6. Giménez-Nadal, José Ignacio & Molina, José Alberto & Velilla, Jorge, 2020. "Commuting and self-employment in Western Europe," Journal of Transport Geography, Elsevier, vol. 88(C).
    7. Murong Guo & Kuang Tang & Zicheng Wang, 2020. "Commuting time and sickness absence in China: Rural/urban variations and Hukou impacts," The Economic and Labour Relations Review, , vol. 31(1), pages 76-95, March.
    8. Belloc, Ignacio, 2021. "El tiempo de desplazamiento al lugar de trabajo en el Reino Unido: Diferencias entre asalariados y autoempleados [Commuting time in the United Kingdom: Differences between wage-earners and self-emp," MPRA Paper 108260, University Library of Munich, Germany.

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    More about this item

    Keywords

    sickness absenteeism; firm productivity; semiparametric methods for estimating production functions; longitudinal matched employer-employee data;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • M59 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Other
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development

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