Last updated: December 2007
Volume 54, Number 3
IMF Staff Papers

Work Absence in Europe

Lusine Lusinyan and Leo Bonato

Full Text of this Article (PDF 396K)

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 C23, I18, I38, J22]