Worker Absenteeism in Search Equilibrium

Engström, Per; Holmlund, Bertil

Worker Absenteeism in Search Equilibrium

IZA Discussion Paper No. 2947

36 Pages Posted: 13 Aug 2007

See all articles by Per Engström

Per Engström

Uppsala University - Department of Economics

Bertil Holmlund

Uppsala University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

There are 2 versions of this paper

Date Written: July 2007

Abstract

The paper presents a 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 maximize profits while recognizing that the compensation package may affect the queue of job applicants and the absence rate. The analysis provides results concerning the effects of social insurance benefits and other determinants of workers' and firms' behavior. The normative anlysis identifies externalities associated with firm-provided sick pay and examines the welfare implications of alternative policies.

Keywords: absenteeism, search, unemployment, social insurance

JEL Classification: J21, J64, J65

Suggested Citation: Suggested Citation

Engström, Per and Holmlund, Bertil, Worker Absenteeism in Search Equilibrium (July 2007). IZA Discussion Paper No. 2947. Available at SSRN: https://ssrn.com/abstract=1006219