SSE/EFI Working Paper Series in Economics and Finance
Per Johansson and Mårten Palme
The Effect of Economic Incentives on Worker Absenteeism: An Empirical Study Using Swedish Micro Data
Abstract: The effect of economic incentives on absenteeism in Sweden
is examined. Based on a utility funcion, frequently used in labour supply
studies, absenteeism is modelled as an individual day-to-day decision.
Implications of compensating wage differentials and efficiency wage
hypotheses are discussed. Two data sets are used: survey data from 1981 and
an annual panel 1981-1984. The dependent variable is the number of days
absent per year for each individual, i.e. the outcomes of the day-to -day
decision are aggregated over the time period of one year. Theory consistent
models allowing for state dependence or unobserved heterogeneity are
derived. Binomial, overdispersed binomial, mixture distribution and Markov
chain models are estimated using maximum likelihood and least squares
techniques. The results suggest that changes in the compensation level of
the sickness insurance and changes in the unemployment rate could explain
about 72 per cent of changes in work absence rate 10 years later.
Keywords: Count data; unobserved heterogeneity; sickness insurance; mixture distribution; (follow links to similar papers)
JEL-Codes: J29; (follow links to similar papers)
31 pages, January 1994
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