Employee Health and Firm Performance

61 Pages Posted: 8 Mar 2022

See all articles by Daniel A. Rettl

Daniel A. Rettl

University of Georgia - Department of Banking and Finance

Alexander Schandlbauer

University of Southern Denmark

Mircea Trandafir

University of Southern Denmark - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: January 31, 2022

Abstract

When workers are in bad health, their productivity declines. We investigate whether the health of employees affects firm performance, taking advantage of the severity of the seasonal influenza seasons as a source of exogenous variation. We find that firms whose employees are particularly affected by influenza experience reductions in their return on assets and in net income. These results are not driven by firm-specific characteristics, as we find the same relationship between influenza severity and firm performance within firms, at the establishment level. We also document substantial heterogeneity in the effects, with small firms and labor-intensive firms driving our findings. This suggests that labor is an important driver of firm performance and that capital-intensive and larger firms are better able to shift resources in response to temporary shocks to their workforce. Back-of-the-envelope calculations suggest that smaller firms may be better off subsidizing vaccination programs for their employees.

Keywords: seasonal influenza, health shock, firm performance

JEL Classification: L25, I12, G30, J31

Suggested Citation

Rettl, Daniel A. and Schandlbauer, Alexander and Trandafir, Mircea, Employee Health and Firm Performance (January 31, 2022). Available at SSRN: https://ssrn.com/abstract=4022672 or http://dx.doi.org/10.2139/ssrn.4022672

Daniel A. Rettl

University of Georgia - Department of Banking and Finance ( email )

Terry College of Business
Athens, GA 30602-6253
United States

Alexander Schandlbauer (Contact Author)

University of Southern Denmark ( email )

Campusvej 55
Odense, 5230
Denmark

HOME PAGE: http://sites.google.com/site/alexanderschandlbauer/

Mircea Trandafir

University of Southern Denmark - Department of Economics ( email )

Odense
Denmark

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