Working Papers in Economics,
University of Bergen, Department of Economics

Abstract: Sickness absence has risen over the past years in Norway. One explanation put forward is that a tougher labor market represents a health hazard, while a competing hypothesis predicts that loss of job security works as a disciplinary device. In this analysis we aim to trace a causal impact of organizational turmoil or job insecurity on sickness absence, applying a difference-in-difference approach. Utilizing a negative financial shock that hit specific employers and workplaces, we find that sickness absence decreased considerably in the following year. The decrease is substantially larger among male than among female employees, and stronger for days of sickness absence than for its incidence. Acknowledgements: The paper has benefited from comments at the 2011 Norwegian Social Insurance Research Meeting in Lillehammer and the 2012 HEB/HERO workshop in Geilo. We are also grateful for information from Ingvar Linde, Jan G. Myrvang, and chief executives of the eight municipalities impacted by the financial shock. Remaining errors are the authors’ sole responsibility. Financial support from the Norwegian Research Council (Grant 187912) is gratefully acknowledged.

Keywords: Worker absenteeism; sickness absence; organizational schange; job security; difference-in-differences

JEL-codes: H53; I18; J22; J28; J45

31 pages, April 30, 2012

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