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The effect of permanent employment on absenteeism: evidence from labor reforms in Spain

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<mark>Journal publication date</mark>1/03/2018
<mark>Journal</mark>Industrial and Labor Relations Review
Issue number2
Number of pages25
Pages (from-to)525-549
Early online date30/06/17
Original languageEnglish


Restrictive employment protection legislation has been highlighted as a key reason for lower labor productivity in Europe compared to the United States. Evidence in the literature has shown robust effects of employment protection on effort, though the effects appear too small to generate marked cross-country differences in labor productivity. The authors revisit this issue using representative data of private-sector workers in Spain. A range of legislative changes aimed at reducing the incidence of temporary employment are used to estimate the effect of permanent employment on one aspect of effort, absenteeism. Results suggest that being employed on a permanent contract increases the probability of being absent from work due to sickness by approximately 5.3 percentage points and the time absent by approximately 0.30 of a day per week. These results suggest that cross-country differences in employment protection have the potential to have a substantial impact on labor productivity.

Bibliographic note

The final, definitive version of this article has been published in the Journal, ILR Review, 71 (2), 2018, © SAGE Publications Ltd, 2018 by SAGE Publications Ltd at the ILR Review page: http://journals.sagepub.com/home/ilr on SAGE Journals Online: http://journals.sagepub.com/