Seminar Papers, Institute for International Economic Studies, Stockholm University
No 743:
Job Security and Work Absence: Evidence form a Natural Experiment
Assar Lindbeck ()
, Mårten Palme ()
and Mats Persson ()
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.
Keywords: Seniority rules; sick pay insurance; firing costs; moral hazard; (follow links to similar papers)
JEL-Codes: H53; I38; J22; J50; M51; (follow links to similar papers)
37 pages, February 1, 2006
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