Property Rights, Sick Pay and Effort Supply
66 Pages Posted: 9 Feb 2023 Last revised: 27 Nov 2023
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: Suggested Citation