Scandinavian Working Papers in Economics
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FIEF - Trade Union Institute for Economic Research Working Paper Series, FIEF - Trade Union Institute for Economic Research

No 167:
Incentives and Selection in Cyclical Absenteeism

Mahmood Arai and Peter Skogman Thoursie

Abstract: Procyclical absenteeism might be due to higher sick-rates of marginal workers, or a consequence of procyclical sick-report incentives. These hypotheses predict opposite signs for the correlation between sick-rates and shares of temporary contracts. This is the case, when the share of temporary contracts is a proxy for the share of marginal workers, and an indicator of stronger incentives for job presence of temporary employees who have generally weaker job security than those on permanent contracts. Using industry-region panel data, we find a stable negative correlation between sick-rates and shares of temporary contracts implying that procyclical sick-rate is compatible with the idea that sick-report incentives are procyclical.

Keywords: Absenteeism; Temporary Employment; (follow links to similar papers)

JEL-Codes: J22; (follow links to similar papers)

16 pages, March 5, 2001

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This paper is forthcoming as:
Arai, Mahmood and Peter Skogman Thoursie, 'Incentives and Selection in Cyclical Absenteeism', Labour Economics.

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