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No Payoff from Time Off? Mandated Paid Vacation and Late-Career Employment

Author

Listed:
  • Bensnes, Simon

    (Statistics Norway)

  • Hernaes, Øystein

    (Ragnar Frisch Centre for Economic Research)

  • King, Max-Emil M.

    (Ragnar Frisch Centre for Economic Research)

Abstract

This study examines the impact of receiving one additional week of paid vacation on labor market attachment among Norwegian workers aged 60+. Employing a triple-differences estimation strategy, we exploit age-based eligibility thresholds before and after a 2009 reform to identify causal effects. Our findings indicate that the extra leave has negligible effects on both employment, sickness absence and disability benefit receipt in the year workers first receive it. If anything, some workers use the additional vacation time to increase earnings from secondary employers. The results imply that policymakers should consider alternative measures to mandated leave to support an aging workforce.

Suggested Citation

  • Bensnes, Simon & Hernaes, Øystein & King, Max-Emil M., 2025. "No Payoff from Time Off? Mandated Paid Vacation and Late-Career Employment," IZA Discussion Papers 18121, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp18121
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    Keywords

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    JEL classification:

    • H8 - Public Economics - - Miscellaneous Issues
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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