Pay, Technology, and the Cost of Worker Absence

Abstract

"Conventional studies of absenteeism concentrate on labor supply. An equilibrium approach, however, establishes that the shadow cost of absenteeism varies across firms that operate different technologies. Using an unusual employee/employer matched data set from France, which records both individual worker absenteeism and information about technology, we show that firms operating just-in-time technology have higher shadow costs of absence than firms that do not. The estimates are used to calculate the economy-wide cost of absence, which turns out to be very low." ("JEL" J22, J31, J41) Copyright 2006 Western Economic Association International.

Child-to-Teacher Ratio and Day Care Teacher Sickness Absenteeism

“…Moreover, they confirm the more general finding that peer pressure in teams and 'work culture' affects employee behaviour (Mohnen et al, 2008). Coles et al (2007) use French employer-employee data to investigate the costs of sickness absence across sectors. By using Norwegian firm-level data for the 1990s, Ose (2005) finds that physical surroundings in the working area, work strain and 'cultural factors' as for instance cooperation and trust among employees and the closest superior, and the potential for employees to influence their own work situation have a significant effect on firms' average sickness absenteeism.…”

Valuing productivity loss due to absenteeism: firm-level evidence from a Canadian linked employer-employee survey

“…A large literature has documented substantial wage differentials on the basis of firm size [12, 13], industry [14–16], group or non-group work [17, 18], union and non-union contracts [19, 20], business cycle [21, 22], competitiveness of the industry [23, 24], and government regulation [25, 26]. These wage gaps are conventionally estimated from a wage regression using individual-level data.…”

“…A related literature seeks to uncover factors that determine or affect worker absence by modeling absence [17, 31–35] or focuses on the association between health conditions and absenteeism [36–39]. Few studies have estimated the impact of absenteeism on wages or production, and none have examined whether their impact varies by team work status and firm size.…”

“…Coles et al introduced the idea of the shadow cost of absenteeism: the relatively high wage paid by firms requiring a low level of absenteeism, to compensate workers for attending work reliably [17]. They use just-in-time as an indicator of an assembly line production process.…”

Teamwork, monitoring and absence

“…This follows earlier work in which Barmby et al (1991) show that the structure of the sickness pay scheme influences absence, contending that managers structure such schemes based on the underlying cost of absence to the firm. Coles and Treble (1996) build on Weiss (1985) to argue that interdependent production (teamwork) is critical in determining this underlying cost to the firm, while Coles et al (2007) make a related point arguing that "just in time" inventory technology (a proxy for teamwork) increases the cost of absence and causes firms to invest more in reducing absence. Barmby and Stephan (2000) show that larger firms with teamwork can profitably conserve on buffer-stock workers, reduce monitoring of absence and thus allow absence rates to increase.…”