Scandinavian Working Papers in Economics

Working Paper Series,
IFAU - Institute for Evaluation of Labour Market and Education Policy

No 2002:13: Assessing the effect of public policy on worker absenteeism

Per Johansson () and Mårten Palme ()
Additional contact information
Per Johansson: IFAU - Institute for Labour Market Policy Evaluation, Postal: P O Box 513, SE-751 20 Uppsala, Sweden
Mårten Palme: Stockholm School of Economics, Postal: P O Box 6501, SE-113 83 Stockholm, Sweden

Abstract: We analyze the effect of economic incentives on worker absenteeism, using panel data on work absence for 1990 and 1991 with a sample of 1,396 Swedish blue-collar workers. During this period Sweden implemented major reforms of both its national income replacement program for short-term sickness and income taxes. Both affected the worker's cost of missing work. Our econometric model allows for state-dependent dynamic behavior and control for unobserved heterogeneity. The latter proves to be an important consideration. We find that the cost of being absent significantly affects work absence behavior.

Keywords: Sickness insurance; unobserved heterogeneity; logit regression

JEL-codes: J22

29 pages, June 30, 2001

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