Advertisement

IMF Staff Papers

, Volume 54, Issue 3, pp 475–538 | Cite as

Work Absence in Europe

  • Lusine Lusinyan
  • Leo Bonato
Article

Abstract

Work absence is a part of an individual's decision concerning hours worked. This paper focuses on sickness absence in Europe and builds on an analytical framework in which absence enters both labor supply and demand considerations, with sickness insurance provisions and labor market institutions affecting the costs of absence. The results from a panel of 18 European countries indicate that absence is higher under generous insurance systems and where employers bear little responsibility for their costs. Shorter working hours reduce absence, but flexible working arrangements are preferable if labor supply erosion is a concern.

JEL Classifications

C23 I18 I38 J22 

References

  1. Alesina, A., E. Glaeser, and B. Sacerdote, 2005, “Work and Leisure in the U.S. and Europe: Why So Different?,” NBER Working Paper No. 11278 (Cambridge, Massachusetts, National Bureau of Economic Research).Google Scholar
  2. Allen, S.G., 1981, “An Empirical Model of Work Attendance,” Review of Economics and Statistics, Vol. 63 (February), pp. 77–87.CrossRefGoogle Scholar
  3. Andersen, T., and P. Molander, 2003, “Policy Options for Reforming the Welfare State,” in Alternatives for Welfare Policy, ed. by T. Andersen and P. Molander (Cambridge, United Kingdom, Cambridge University Press).CrossRefGoogle Scholar
  4. Anderson, T.W., and C. Hsiao, 1982, “Formulation and Estimation of Dynamic Models Using Panel Data,” Journal of Econometrics, Vol. 18 (January), pp. 47–82.CrossRefGoogle Scholar
  5. Andrén, D., 2001a, “Long-Term Absenteeism Due to Sickness: The Swedish Experience, 1986–1991,” Working Paper in Economics No. 47 (Göteborg, Sweden, Department of Economics, Göteborg University). Available via the Internet: http://www.handels.gu.se/epc/data/html/pages/PDF/gunwpe0047.pdf.
  6. Andrén, D., 2001b, “Short-Term Absenteeism Due to Sickness: The Swedish Experience, 1986–1991,” Working Paper in Economics No. 46 (Göteborg, Sweden, Department of Economics, Göteborg University). Available via the Internet: http://www.handels.gu.se/epc/data/html/pages/PDF/gunwpe0046.pdf.
  7. Andrén, D., 2003, “Sickness-Related Absenteeism and Economic Incentives in Sweden: A History of Reforms,” CESifo DICE Report 3/2003 (Munich, Center for Economic Studies, Ifo Institute for Economic Research).Google Scholar
  8. Arai, M., and P. Skogman Thoursie, 2001, “Incentives and Selection in Cyclical Absenteeism,” FIEF Working Paper No. 167 (Stockholm, Trade Union Institute for Economic Research).Google Scholar
  9. Arellano, M., and S. Bond, 1991, “Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,” Review of Economic Studies, Vol. 58 (April), pp. 277–297.CrossRefGoogle Scholar
  10. Audas, R., and J. Goddard, 2001, “Absenteeism, Seasonality, and the Business Cycle,” Journal of Economics and Business, Vol. 53 (July), pp. 405–419.CrossRefGoogle Scholar
  11. Barmby, T.A., M.G. Ercolani, and J.G Treble, 2002, “Sickness Absence: An International Comparison,” Economic Journal, Vol. 112 (June), pp. F315–F331.CrossRefGoogle Scholar
  12. Barmby, T.A., M.G. Ercolani, and J.G Treble,2004, “Sickness Absence in the UK: 1984–2002,” Swedish Economic Policy Review, Vol. 11, pp. 65–88.Google Scholar
  13. Bergendorff, S., and others, 2004, “Sickness Absence in Europe—A Comparative Study,” Social Insurance Studies No. 2 (Swedish National Insurance Board).Google Scholar
  14. Blanchard, O., 2004, “The Economic Future of Europe,” NBER Working Paper No. 10310 (Cambridge, Massachusetts, National Bureau of Economic Research).Google Scholar
  15. Blundell, R., and S. Bond, 1998, “Initial Conditions and Moment Restrictions in Dynamic Panel Data Models,” Journal of Econometrics, Vol. 87 (August), pp. 115–143.CrossRefGoogle Scholar
  16. Brown, S., and J.G. Sessions, 1996, “The Economics of Absence: Theory and Evidence,” Journal of Economic Surveys, Vol. 10 (March), pp. 23–53.CrossRefGoogle Scholar
  17. Bruno, G.S.F., 2004, “Approximating the Bias of the LSDV Estimator for Dynamic Unbalanced Panel Data Models,” Studi e quaderni dell’Istituto di Economia Politica EEA 2004-1 (Milan, Università Bocconi) (presented at 10th UK Stata Users Group Meetings, June 2004). Available via the Internet: http://www.stata.com/meeting/10uk/WP2004-1.pdf.
  18. Bun, M.J.G., and J.F. Kiviet, 2006, “The Effects of Dynamic Feedbacks on LS and MM Estimator Accuracy in Panel Data Models,” Journal of Econometrics, Vol. 132 (June), pp. 409–444.CrossRefGoogle Scholar
  19. Davidson, R., and J. MacKinnon, 1993, Estimation and Inference in Econometrics (New York, Oxford University Press).Google Scholar
  20. De Jong, P., and M. Lindeboom, 2004, “Privatisation of Sickness Insurance: Evidence from the Netherlands,” Swedish Economic Policy Review, Vol. 11, pp. 121–143. Available via the Internet: http://www.ekonomiskaradet.se/Panda_ekonomiska/Data/Documents/sepr2004/DeJong_Lindeboom.pdf.Google Scholar
  21. Drago, R., and M. Wooden, 1992, “The Determinants of Labor Absence: Economic Factors and Workgroup Norms Across Countries,” Industrial and Labor Relations Review, Vol. 45 (July), pp. 764–778.CrossRefGoogle Scholar
  22. Drukker, D.M., 2003, “Testing for Serial Correlation in Linear Panel-Data Models,” Stata Journal, Vol. 3 (June), pp. 168–177.Google Scholar
  23. Dunn, L.F., and S.A. Youngblood, 1986, “Absenteeism as a Mechanism for Approaching an Optimal Labor Market Equilibrium: An Empirical Study,” Review of Economics and Statistics, Vol. 68 (November), pp. 668–674.CrossRefGoogle Scholar
  24. European Foundation for the Improvement of Living and Working Conditions, European Industrial Relations Observatory (EIRO) (Dublin, various issues). Available via the Internet: http://www.eiro.eurofound.eu.int.
  25. Eurostat, New Cronos Database (Luxembourg, Statistical Office of the European Communities).Google Scholar
  26. Galí, J., M. Gertler, and J.D. López-Salido, 2005, “Markups, Gaps, and the Welfare Costs of Business Fluctuations,” Economics Working Paper No. 836 (Barcelona, Department of Economics and Business, Universitat Pompeu Fabra). Available via the Internet: http://www.econ.upf.edu/docs/papers/downloads/836.pdf.
  27. Henrekson, M., and M. Persson, 2004, “The Effects on Sick Leave of Changes in the Sickness Insurance System,” Journal of Labor Economics, Vol. 22 (June), pp. 87–114.CrossRefGoogle Scholar
  28. Ichino, A., and R.T. Riphahn, 2005, “The Effect of Employment Protection on Worker Effort: A Comparison of Absenteeism During and After Probation,” Journal of the European Economic Association, Vol. 3 (March), pp. 120–143.CrossRefGoogle Scholar
  29. Im, K.S., M.H. Pesaran, and Y. Shin, 1997, Testing for Unit Roots in Heterogeneous Panels (Cambridge, United Kingdom, University of Cambridge, Department of Applied Economics, December) Available via the Internet: http://www.econ.cam.ac.uk/faculty/pesaran/lm.pdf.Google Scholar
  30. International Labor Organization (ILO), 2003, Key Indicators of the Labour Markets (KILM) (Geneva, International Labor Organization, 3rd ed.).Google Scholar
  31. International Monetary Fund (IMF), 2003, World Economic Outlook, April 2003: A Survey by the Staff of the International Monetary Fund World Economic and Financial Surveys (Washington, International Monetary Fund).Google Scholar
  32. International Monetary Fund (IMF), 2004, World Economic Outlook, April 2004: A Survey by the Staff of the International Monetary Fund World Economic and Financial Surveys (Washington, International Monetary Fund).Google Scholar
  33. Johansson, P., and M. Palme, 1996, “Do Economic Incentives Affect Work Absence? Empirical Evidence Using Swedish Micro Data,” Journal of Public Economics, Vol. 59 (February), pp. 195–218.CrossRefGoogle Scholar
  34. Johansson, P., and M. Palme, 2002, “Assessing the Effect of Public Policy on Worker Absenteeism,” Journal of Human Resources, Vol. 37 (Spring), pp. 381–409.CrossRefGoogle Scholar
  35. Judson, R.A., and A.L. Owen, 1999, “Estimating Dynamic Panel Data Models: A Guide for Macroeconomists,” Economics Letters, Vol. 65 (October), pp. 9–15.CrossRefGoogle Scholar
  36. Kaivanto, K., 1997, “An Alternative Model of Pro-Cyclical Absenteeism,” Economics Letters, Vol. 54 (January), pp. 29–34.CrossRefGoogle Scholar
  37. Kiviet, J.F., 1995, “On Bias, Inconsistency, and Efficiency of Various Estimators in Dynamic Panel Data Models,” Journal of Econometrics, Vol. 68 (July), pp. 53–78.CrossRefGoogle Scholar
  38. Kocherlakota, N., 2003, “Simplifying Optimal Unemployment Insurance: The Impact of Hidden Savings,” (unpublished; Federal Reserve Bank of Minneapolis).Google Scholar
  39. Larsson, L., 2002, “Sick of Being Unemployed? Interactions Between Unemployment and Sickness Insurance in Sweden,” IFAU Working Paper 2002:6 (Uppsala, Sweden, Institute for Labour Market Policy Evaluation). Available via the Internet: http://www.ifau.se/upload/pdf/se/2002/wp02-06.pdf.
  40. Larsson, L., 2004, “Harmonizing Unemployment and Sickness Insurance: Why (Not)?,” IFAU Working Paper 2004: 8 (Uppsala, Sweden, Institute for Labour Market Policy Evaluation). Available via the Internet: http://www.ifau.se/upload/pdf/se/2004/wp04-08.pdf.
  41. Leigh, J.P., 1985, “The Effects of Unemployment and the Business Cycle on Absenteeism,” Journal of Economics and Business, Vol. 37 (May), pp. 159–170.CrossRefGoogle Scholar
  42. Lentz, R., 2007, “Optimal Unemployment Insurance in an Estimated Job Search Model with Savings,” (unpublished; Madison, University of Wisconsin). Available via the Internet: http://www.ssc.wisc.edu/∼rlentz/ressources/structui.pdf.
  43. Lentz, R., and T. Tranæs, 2005, “Job Search and Savings: Wealth Effects and Duration Dependence,” Journal of Labor Economics, Vol. 23 (July), pp. 467–490.CrossRefGoogle Scholar
  44. Levin, A., and C. Lin, 1992, “Unit Root Tests in Panel Data: Asymptotic and Finite-Sample Properties,” Economics Working Paper 92–23 (La Jolla, California, University of California, San Diego). Available via the Internet: http://www.econ.ucsd.edu/papers/files/ucsd9223.pdf.
  45. Lindbeck, A., 1997, “The Swedish Experiment,” Journal of Economic Literature, Vol. 35 (September), pp. 1273–1319.Google Scholar
  46. Lusinyan, L., 2005, “Dynamic Panel Data Models in Macroeconomic Applications: The Role of Cross-Sectional Dependence,” presented at the 12th Conference on Panel Data, Copenhagen, June (Ph.D. thesis; Florence, European University Institute).Google Scholar
  47. Mulligan, C., 2002, “A Century of Labor-Leisure Distortions,” NBER Working Paper No. 8774 (Cambridge, Massachusetts, National Bureau of Economic Research).Google Scholar
  48. Mutual Information System on Social Protection in the EU Member States and the EEA (MISSOC), 2006, “Social Protection in the EU Member States and the European Economic Area (Brussels, European Commission, Directorate-General for Employment and Social Affairs). Available via the Internet: http://europa.eu.int/comm/employment_social/social_protection/missoc_en.htm.
  49. Nickell, S., and L. Nunziata, 2001, Labour Market Institutions Database (unpublished; London, Centre for Economic Performance, London School of Economics).Google Scholar
  50. Nickell, S., W. Ochel, and G. Quintini, 2001, “The Beveridge Curve, Unemployment and Wages in the OECD from the 1960s to the 1990s,” CEP Discussion Paper No. 0502 (London, Centre for Economic Performance, London School of Economics). Available via the Internet: http://cep.lse.ac.uk/pubs/download/DP0502.pdf.
  51. Organization for Economic Cooperation and Development (OECD), 2003, The Sources of Economic Growth in OECD Countries (Paris, Organization for Economic Cooperation and Development).Google Scholar
  52. Organization for Economic Cooperation and Development (OECD), Economic Outlook Database (Paris, Organization for Economic Cooperation and Development) Available via the Internet: http://www.sourceoecd.org.
  53. Organization for Economic Cooperation and Development (OECD), Employment Outlook, Statistical Annex (Paris, various issues). Available via the Internet: http://www.oecd.org/document/37/0,2340,en_2649_34731_31736485_1_1_1_1,00.html.
  54. Organization for Economic Cooperation and Development (OECD), Social Expenditure Database (SOCX) (Paris, Organization for Economic Cooperation and Development) Available via the Internet: http://www.oecd.org/document/2/0,2340,en_2649_34635_31612994_1_1_1_1,00.html.
  55. Palme, M., and I. Svensson, 2003, “Pathways to Retirement and Retirement Incentives in Sweden,” in Alternatives for Welfare Policy, ed. by T. Andersen and P. Molander (Cambridge, United Kingdom, Cambridge University Press).Google Scholar
  56. Prescott, E.C., 2004, “Why Do Americans Work So Much More Than Europeans?” NBER Working Paper No. 10316 (Cambridge, Massachusetts, National Bureau of Economic Research).Google Scholar
  57. Scruggs, L., 2004, Comparative Welfare Entitlements Data Set (Storrs, Connecticut, University of Connecticut). Available via the Internet: http://sp.uconn.edu/∼scruggs/wp.htm.Google Scholar
  58. Shapiro, C., and J.E. Stiglitz, 1984, “Equilibrium Unemployment as a Worker Discipline Device,” American Economic Review, Vol. 74 (June), pp. 433–444.Google Scholar
  59. Skogman Thoursie, P., 2002, “Reporting Sick: Are Sporting Events Contagious?” Research Paper in Economics 2002: 4 (Stockholm, Department of Economics, Stockholm University).Google Scholar
  60. United States Social Security Administration (U.S. SSA) (various issues) Social Security Programs Throughout the World (Washington, United States Social Security Administration), Available via the Internet: http://www.ssa.gov/policy/docs/progdesc/ssptw/.
  61. Werning, I., 2002, “Optimal Unemployment Insurance with Unobservable Savings,” (unpublished; Cambridge, Massachusetts, Massachusetts Institute of Technology). Available via the Internet: http://econ-www.mit.edu/faculty/download_pdf.php?id=902.
  62. Wooldridge, J.M, 2002, Econometric Analysis of Cross Section and Panel Data (Cambridge, Massachusetts, MIT Press).Google Scholar

Copyright information

© International Monetary Fund 2007

Authors and Affiliations

  • Lusine Lusinyan
  • Leo Bonato

There are no affiliations available

Personalised recommendations