Publications / Papers / 2008 / 2008:023 Absenteeism, efficiency wages and economic incentives
Absenteeism, efficiency wages and economic incentives
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Norwegian panel register data on 170 000 jobs in over 800 workplaces during the period 2000-2004 are used to study the impact of tax legislation changes on worker physician-certified absence behaviour and workers’ pay. Evidence is found in accordance with the notion that increased marginal earnings taxes decrease the return to effort, and thus cause increased absenteeism and lowered pay. Controlled for fixed job effects, a higher anticipated marginal tax rate increases the absence rate, overall and with respect to muscular-skeletal illnesses, but this is not observed for injuries and in fixed pay workplaces providing full compensation for absent workers.