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Correlated Poisson Processes with Unobserved Heterogeneity: Estimating the Determinants of Paid and Unpaid Leave

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Author Info
Dionne, Georges () (HEC Montreal)
Dostie, Benoit () (HEC Montreal)

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Abstract

Using linked employer-employee data from the Canadian Workplace and Employee Survey 1999-2004, we provide new evidence on how the cost of absence affects labor supply decisions. We use a particular feature of the data by which total absences are divided into three separate categories: sick paid days, other paid days and unpaid days. This division introduces variations in the way workers are compensated for absence (the cost of absence) and allows us to estimate more precisely how variations in such costs affect absenteeism decisions. We find an absence elasticity of -0.37. We also find unobserved heterogeneity to play different roles for workers and workplaces: some workers are more frequently absent whatever the reason, but paid and unpaid leaves are negatively correlated at the workplace level.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3642.

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Length: 31 pages
Date of creation: Aug 2008
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Handle: RePEc:iza:izadps:dp3642

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Related research
Keywords: absenteeism linked employer-employee data unobserved heterogeneity count data model correlated random effects

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Find related papers by JEL classification:
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
M52 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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References listed on IDEAS
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  1. Barmby, Tim, 2002. "Worker absenteeism: a discrete hazard model with bivariate heterogeneity," Labour Economics, Elsevier, vol. 9(4), pages 469-476, September. [Downloadable!] (restricted)
  2. Göran Kauermann & Renate Ortlieb, 2004. "Temporal pattern in number of staff on sick leave: the effect of downsizing," Journal Of The Royal Statistical Society Series C, Royal Statistical Society, vol. 53(2), pages 355-367. [Downloadable!] (restricted)
  3. 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. [Downloadable!] (restricted)
  4. Andrea Ichino & Regina T. Riphahn, 2005. "The Effect of Employment Protection on Worker Effort: Absenteeism During and After Probation," Journal of the European Economic Association, MIT Press, vol. 3(1), pages 120-143, 03. [Downloadable!] (restricted)
  5. Robert Drago & Mark Wooden, 1992. "The determinants of labor absence: Economic factors and workgroup norms across countries," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 45(4), pages 764-778, July.
  6. Allen, Steven G, 1981. "An Empirical Model of Work Attendance," The Review of Economics and Statistics, MIT Press, vol. 63(1), pages 77-87, February. [Downloadable!] (restricted)
  7. Miguel A. Delgado & Thomas J. Kniesner, 1997. "Count Data Models With Variance Of Unknown Form: An Application To A Hedonic Model Of Worker Absenteeism," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 41-49, February. [Downloadable!] (restricted)
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  8. Magnus Henrekson & Mats Persson, 2004. "The Effects on Sick Leave of Changes in the Sickness Insurance System," Journal of Labor Economics, University of Chicago Press, vol. 22(1), pages 87-114, January. [Downloadable!]
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  9. John S. Heywood & Uwe Jirjahn, 2004. "Teams, Teamwork and Absence," Scandinavian Journal of Economics, Blackwell Publishing, vol. 106(4), pages 765-782, December. [Downloadable!] (restricted)
  10. Georges Dionne & Benoit Dostie, 2007. "New Evidence on the Determinants of Absenteeism Using Linked Employer-Employee Data," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 61(1), pages 108-120, October.
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  11. Ose, Solveig Osborg, 2005. "Working conditions, compensation and absenteeism," Journal of Health Economics, Elsevier, vol. 24(1), pages 161-188, January. [Downloadable!] (restricted)
  12. Heckman, James J & Walker, James R, 1990. "The Relationship between Wages and Income and the Timing and Spacing of Births: Evidence from Swedish Longitudinal Data," Econometrica, Econometric Society, vol. 58(6), pages 1411-41, November. [Downloadable!] (restricted)
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