The Healthy Fright of Losing a Good One for a Bad One
In this paper we study the effect of different degrees of employment protection on absenteeism, paying attention to differences between workers moving from protected jobs to insecure jobs, on the one hand, and workers moving from insecure to secure jobs, on the other hand. Using a large representative sample of Italian workers, we show that workers' reaction in terms of sickness leave is not symmetric: losing protection (bad news) is more effective than gaining it (good news). We claim that this asymmetry is consistent with the behavior of financial markets responding to good and bad news. In our case, workers react in a more prudential way to improvements in their employment status ("wait and see" strategy), while they do immediately adjust to worsening job security by showing off healthy behavior.
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References listed on IDEAS
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- Olsson, Martin, 2009.
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- Ichino, Andrea & Muehlheusser, Gerd, 2004. "How Often Should You Open the Door? Optimal Monitoring to Screen Heterogeneous Agents," IZA Discussion Papers 987, Institute for the Study of Labor (IZA).
- Andrea Ichino & Gerd Muehlheusser, 2003. "How often should you open the door? Optimal monitoring to screen heterogeneous agents," Diskussionsschriften dp0319, Universitaet Bern, Departement Volkswirtschaft.
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- Vincenzo Scoppa, 2010.
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- Scoppa, Vincenzo, 2008. "Worker Absenteeism and Incentives: Evidence from Italy," MPRA Paper 16858, University Library of Munich, Germany.
- Hesselius, Patrik, 2007. "Does sickness absence increase the risk of unemployment?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(2), pages 288-310, April.
- Johansson, Per & Palme, Marten, 2005. "Moral hazard and sickness insurance," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1879-1890, September.
- Arai, Mahmood & Thoursie, Peter Skogman, 2005.
"Incentives and selection in cyclical absenteeism,"
Elsevier, vol. 12(2), pages 269-280, April.
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