Scandinavian Working Papers in Economics

Memorandum,
Oslo University, Department of Economics

No 20/2005: Organisational Change, Absenteeism and Welfare Dependency

Knut Røed () and Elisabeth Fevang ()
Additional contact information
Knut Røed: The Ragnar Frisch Centre for Economic Research, Postal: Gaustadalléen 21, N-0349 Oslo, Norway
Elisabeth Fevang: The Ragnar Frisch Centre for Economic Research, Postal: Gaustadalléen 21, N-0349 Oslo, Norway

Abstract: We show that recent attempts to reorganise and cut costs in the Norwegian health care and social services sectors have had the unintended side effects of raising the level of sickness absence and disability among the employees, and that these effects have persisted several years after completion of the reorganisation processes. Since a substantial proportion of the resulting costs are external to the decision-makers, we suspect that the pace of change may have been excessively high. Changes that were efficient from each service provider’s point of view may have been inefficient from a social and a public-finance point of view.

Keywords: Absenteeism; hazard rate model; NPMLE

JEL-codes: C14; I38; J28

41 pages, August 8, 2005

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