Property Rights, Sick Pay and Effort Supply

66 Pages Posted: 9 Feb 2023 Last revised: 27 Nov 2023

See all articles by Pablo Blanchard

Pablo Blanchard

Universidad de la República - Facultad de Ciencias Económicas y de Administración (FCEA)

Gabriel Burdin

University of Leeds - Faculty of Business; IZA Institute of Labor Economics

Andrés Dean

Universidad de la Republica - Instituto de Economía

Date Written: November 21, 2023

Abstract

Direct evidence on how effort provision varies across property rights systems remains rare. This paper studies the absence behaviour of individuals employed in worker cooperatives, that is, in firms ultimately controlled by their workforce. Leveraging employment data matched with sick leave records and variation in the Uruguayan statutory sick pay, we show that absenteeism differentially increased for individuals affected by the reform and employed in cooperatives. The effect is driven by co-op members, hard-to-diagnose (and, hence, more prone to moral hazard reporting problems) musculoskeletal conditions and large cooperatives. Conventional firms used dismissals more intensely than cooperatives as a threat to keep absenteeism in check after the reform.

Keywords: Effort, absenteeism, sick pay, cooperatives, property rights, teams, moral hazard.

JEL Classification: I18, J22, J54

Suggested Citation

Blanchard, Pablo and Burdin, Gabriel and Dean, Andrés, Property Rights, Sick Pay and Effort Supply (November 21, 2023). Leeds University Business School Working Paper, Available at SSRN: https://ssrn.com/abstract=4353115 or http://dx.doi.org/10.2139/ssrn.4353115

Pablo Blanchard

Universidad de la República - Facultad de Ciencias Económicas y de Administración (FCEA) ( email )

Eduardo Acevedo 1139
Montevideo, Montevideo 11400
Uruguay

Gabriel Burdin (Contact Author)

University of Leeds - Faculty of Business ( email )

Leeds LS2 9JT
United Kingdom

IZA Institute of Labor Economics ( email )

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

Andrés Dean

Universidad de la Republica - Instituto de Economía ( email )

Uruguay

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