Worker Absenteeism in Search Equilibrium

29 Pages Posted: 20 Nov 2007

See all articles by Per Engström

Per Engström

Uppsala University

Bertil Holmlund

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

Date Written: 2007-01

Abstract

In this paper we introduce 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 analysis identifies externalities associated with firm-provided sick pay and examines the welfare implications of alternative policies.

Suggested Citation

Engström, Per and Holmlund, Bertil, Worker Absenteeism in Search Equilibrium (2007-01). Scandinavian Journal of Economics, Vol. 109, Issue 3, pp. 439-467, September 2007. Available at SSRN: https://ssrn.com/abstract=1031534 or http://dx.doi.org/10.1111/j.1467-9442.2007.00501.x

Per Engström (Contact Author)

Uppsala University ( email )

Box 513
Uppsala, 751 20
Sweden

Bertil Holmlund

Uppsala University - Department of Economics ( email )

SE-75120 Uppsala
Sweden
+46 18 471 1122 (Phone)
+46 18 471 1478 (Fax)

HOME PAGE: http://www.nek.uu.se/faculty/holmlund/index.html

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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