Employee Health and Firm Performance
66 Pages Posted: 8 Mar 2022 Last revised: 6 Feb 2024
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Employee Health and Firm Performance
Employee Health and Firm Performance
Date Written: January 30, 2024
Abstract
Using administrative data on the universe of private firms in Denmark, we find that even temporary and small health shocks to employee health like seasonal influenza can significantly reduce firm profitability. The effects are driven by labor-intensive firms and decrease in firm size and financial flexibility, suggesting that firms that are better able to shift resources can insulate themselves better. Our results indicate that employees are shielded from these negative effects, while owners (especially of small firms) see reduced dividends. Back-of-the-envelope calculations propose that all but the largest firms may benefit from subsidizing vaccination programs for their employees.
Keywords: seasonal influenza, health shock, employee health, firm performance
JEL Classification: L25, I12, G30, J31
Suggested Citation: Suggested Citation