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Job Security and Work Absence: Evidence from a Natural Experiment

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  • Lindbeck, Assar

    (The Research Institute of Industrial Economics)

  • Palme, Mårten

    (Stockholm University)

  • Persson, Mats

    (Institute for International Economic Studies)

Abstract

We analyze the consequences for sickness absence of a selective softening of job security legislation for small firms in Sweden in 2001. According to our differences-in-difference estimates, aggregate absence in these firms fell by 0.2-0.3 days per year. This aggregate net figure hides important effects on different groups of employees. Workers remaining in the reform firms after the reform reduced their absence by about one day. People with a high absence record tended to leave reform firms, but these firms also became less reluctant to hire people with a record of high absence.

Suggested Citation

  • Lindbeck, Assar & Palme, Mårten & Persson, Mats, 2006. "Job Security and Work Absence: Evidence from a Natural Experiment," Working Paper Series 660, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0660
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Seniority Rules; Sick Pay Insurance; Firing Costs; Moral Hazard;
    All these keywords.

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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