Employment Protection, Threat and Incentive Effects on Worker Absence

Authors


  • Steve Bradley and Colin Green are at Lancaster University. Gareth Leeves is at Monash University Sunway Campus.

Abstract

This article provides new evidence on the effect of changes in employment protection on worker absence. We use novel multi-organization data to examine changes in worker absence as workers move from temporary to permanent employment contracts. We demonstrate a robust positive effect of employment protection on sickness absence. It has also been suggested that the impact of employment protection on absence and effort is due to a fear of dismissal. We also provide evidence that suggests that temporary workers' absence is influenced by incentives to attain jobs with protection that is unrelated to threat of dismissal. This has not been considered in earlier research. This channel of employment protection effects has important policy implications.

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