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The Effect of Permanent Employment on Absenteeism: Evidence from Labor Reform in Spain

Author

Listed:
  • Inmaculada García Mainar
  • Colin P. Green
  • María Navarro Paniagua

Abstract

Restrictive employment protection legislation has been highlighted as a key reason for lower labor productivity in Europe compared to the United States. Evidence in the literature has shown robust effects of employment protection on effort, though the effects appear too small to generate marked cross-country differences in labor productivity. The authors revisit this issue using representative data of private-sector workers in Spain. A range of legislative changes aimed at reducing the incidence of temporary employment are used to estimate the effect of permanent employment on one aspect of effort, absenteeism. Results suggest that being employed on a permanent contract increases the probability of being absent from work due to sickness by approximately 5.3 percentage points and the time absent by approximately 0.30 of a day per week. These results suggest that cross-country differences in employment protection have the potential to have a substantial impact on labor productivity.

Suggested Citation

  • Inmaculada García Mainar & Colin P. Green & María Navarro Paniagua, 2018. "The Effect of Permanent Employment on Absenteeism: Evidence from Labor Reform in Spain," ILR Review, Cornell University, ILR School, vol. 71(2), pages 525-549, March.
    • Handle: RePEc:sae:ilrrev:v:71:y:2018:i:2:p:525-549
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    Citations

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    Cited by:

    1. María José Suárez & Cristina Muñiz, 2018. "Unobserved heterogeneity in work absence," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(8), pages 1137-1148, November.
    2. Kieu‐Dung Nguyen & Duc‐Thanh Nguyen & Duy‐Dat Nguyen & Van‐Anh Thi Tran, 2021. "Labour law reform and labour market outcomes in Vietnam," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 8(2), pages 299-326, May.
    3. Mark L. Bryan & Andrew M. Bryce & Jennifer Roberts, 2021. "The effect of mental and physical health problems on sickness absence," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(9), pages 1519-1533, December.

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