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Worker Absenteeism in Search Equilibrium
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
2005 (English)Report (Other academic)
Abstract [en]

The paper presents a tractable general equilibrium model of search unemployment that incorporates absence from work as a distinct labor force state. Absenteeism is driven by random shocks to the value of leisure that are private information to the workers. Firms offer wages, and possibly sick pay, so as to maximize expected profits, recognizing that the compensation package affects the queue of job applicants and possibly the absence rate as well. Shocks to the value of leisure among nonemployed individuals interact with their search decisions and trigger movements into and out of the labor force. The analysis provides a number of results concerning the impact of social insurance benefits and other determinants of workers’ and firms’ behavior. For example, higher nonemployment benefits are shown to increase absenteeism among employed workers. The normative anlysis identifies externalities associated with firm-provided sick pay and examines the welfare implications of alternative policies. Conditions are given under which welfare equivalence holds between publicly provided and firm-provided sick pay. Benefit differentiation across states of non-work are found to be associated with non-trival welfare gains.

Place, publisher, year, edition, pages
Uppsala: Department of Economics, Uppsala University , 2005. , 35 p.
Series
Working paper / Department of Economics, Uppsala University (Online), ISSN 1653-6975 ; 2005:22
Keyword [en]
Absenteeism, search, unemployment, social insurance
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:uu:diva-211066OAI: oai:DiVA.org:uu-211066DiVA: diva2:665220
Available from: 2013-11-19 Created: 2013-11-19 Last updated: 2013-11-20Bibliographically approved

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Engström, PerHolmlund, Bertil

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CiteExportLink to record
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Citation style
  • apa
  • ieee
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