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Coming to work while sick: an economic theory of presenteeism with an application to German data

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  • Boris HirschBy
  • Daniel S. J. Lechmann
  • Claus Schnabel
Abstract
Presenteeism, i.e. attending work while sick, is widespread and associated with significant costs. Still, economic analyses of this phenomenon are rare. In a theoretical model, we show that presenteeism arises due to differences between workers in the disutility from workplace attendance. As these differences are unobservable by employers, they set wages that incentivize sick workers to attend work. Using a large representative German data set, we test several hypotheses derived from our model. In line with our predictions, we find that stressful working conditions and bad health status are positively related to presenteeism. Better dismissal protection, captured by higher tenure, is associated with slightly fewer presenteeism days, whereas the role of productivity and skills is inconclusive.

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  • Boris HirschBy & Daniel S. J. Lechmann & Claus Schnabel, 2017. "Coming to work while sick: an economic theory of presenteeism with an application to German data," Oxford Economic Papers, Oxford University Press, vol. 69(4), pages 1010-1031.
    • Handle: RePEc:oup:oxecpp:v:69:y:2017:i:4:p:1010-1031.
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    File URL: http://hdl.handle.net/10.1093/oep/gpx016
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    1. Daniel S. J. Lechmann & Claus Schnabel, 2014. "Absence from Work of the Self-Employed: A Comparison with Paid Employees," Kyklos, Wiley Blackwell, vol. 67(3), pages 368-390, August.
    2. Stefan Pichler & Nicolas R. Ziebarth, 2015. "The Pros and Cons of Sick Pay Schemes: Testing for Contagious Presenteeism and Shirking Behavior," Discussion Papers of DIW Berlin 1509, DIW Berlin, German Institute for Economic Research.
    3. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    4. Hansen, Claus D. & Andersen, Johan H., 2008. "Going ill to work - What personal circumstances, attitudes and work-related factors are associated with sickness presenteeism?," Social Science & Medicine, Elsevier, vol. 67(6), pages 956-964, September.
    5. Monojit Chatterji & Colin J. Tilley, 2002. "Sickness, absenteeism, presenteeism, and sick pay," Oxford Economic Papers, Oxford University Press, vol. 54(4), pages 669-687, October.
    6. Boris HirschBy & Daniel S. J. Lechmann & Claus Schnabel, 2017. "Coming to work while sick: an economic theory of presenteeism with an application to German data," Oxford Economic Papers, Oxford University Press, vol. 69(4), pages 1010-1031.
    7. Fackler, Daniel, 2014. "Establishment survival in East and West Germany: A comparative analysis," Discussion Papers 90, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    8. Boris Hirsch & Michael Oberfichtner & Claus Schnabel, 2014. "The levelling effect of product market competition on gender wage discrimination," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-14, December.
    9. Pichler, Stefan & Ziebarth, Nicolas R., 2015. "The Pros and Cons of Sick Pay Schemes: A Method to Test for Contagious Presenteeism and Shirking Behavior," IZA Discussion Papers 8850, Institute of Labor Economics (IZA).
    10. Schnabel Claus, 2016. "United, Yet Apart? A Note on Persistent Labour Market Differences between Western and Eastern Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(2), pages 157-179, March.
    11. Arnold, Daniel Timo & de Pinto, Marco, 2015. "Sickness absence, presenteeism and work-related characteristics," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113118, Verein für Socialpolitik / German Economic Association.
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    16. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    17. Daniel Arnold & Marco de Pinto, 2015. "How are Work-related Characteristics Linked to Sickness Absence and Presenteeism? Theory and Data," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 135(4), pages 465-498.
    18. Pedersen, Kjeld Møller & Skagen, Kristian, 2014. "The Economics of Presenteeism: A discrete choice & count model framework," DaCHE discussion papers 2014:2, University of Southern Denmark, Dache - Danish Centre for Health Economics.
    19. Puhani, Patrick A. & Sonderhof, Katja, 2010. "The effects of a sick pay reform on absence and on health-related outcomes," Journal of Health Economics, Elsevier, vol. 29(2), pages 285-302, March.
    20. Daniel Arnold, 2016. "Determinants of the Annual Duration of Sickness Presenteeism: Empirical Evidence from European Data," LABOUR, CEIS, vol. 30(2), pages 198-212, June.
    21. Barmby, Tim & Larguem, Makram, 2009. "Coughs and sneezes spread diseases: An empirical study of absenteeism and infectious illness," Journal of Health Economics, Elsevier, vol. 28(5), pages 1012-1017, September.
    22. Daniel Fackler, 2014. "Establishment Survival in East and West Germany: A Comparative Analysis," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 134(2), pages 183-208.
    23. Stefan Pichler, 2015. "Sickness Absence, Moral Hazard, and the Business Cycle," Health Economics, John Wiley & Sons, Ltd., vol. 24(6), pages 692-710, June.
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Stefan Pichler & Nicolas R. Ziebarth, 2015. "The Pros and Cons of Sick Pay Schemes: Testing for Contagious Presenteeism and Shirking Behavior," Discussion Papers of DIW Berlin 1509, DIW Berlin, German Institute for Economic Research.
    2. Boris HirschBy & Daniel S. J. Lechmann & Claus Schnabel, 2017. "Coming to work while sick: an economic theory of presenteeism with an application to German data," Oxford Economic Papers, Oxford University Press, vol. 69(4), pages 1010-1031.
    3. Kuehnle, Daniel & Oberfichtner, Michael, 2017. "Does early child care attendance influence children's cognitive and non-cognitive skill development?," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168241, Verein für Socialpolitik / German Economic Association.
    4. Arnold, Daniel & De Pinto, Marco, 2015. "How are work-related characteristics linked to sickness absence and presenteeism? Theory and data," ZEW Discussion Papers 15-077, ZEW - Leibniz Centre for European Economic Research.
    5. Bubonya, Melisa & Cobb-Clark, Deborah A. & Wooden, Mark, 2017. "Mental health and productivity at work: Does what you do matter?," Labour Economics, Elsevier, vol. 46(C), pages 150-165.
    6. Oberfichtner Michael & Schnabel Claus, 2019. "The German Model of Industrial Relations: (Where) Does It Still Exist?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(1), pages 5-37, January.
    7. Mario Lackner & Hendrik Sonnabend, 2023. "Presenteeism when employers are under pressure: evidence from a high‐stakes environment," Economica, London School of Economics and Political Science, vol. 90(358), pages 477-507, April.
    8. María José Suárez & Cristina Muñiz, 2018. "Unobserved heterogeneity in work absence," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(8), pages 1137-1148, November.
    9. Mark L. Bryan & Andrew M. Bryce & Jennifer Roberts, 2022. "Dysfunctional presenteeism: Effects of physical and mental health on work performance," Manchester School, University of Manchester, vol. 90(4), pages 409-438, July.
    10. Gürtzgen, Nicole & Hiesinger, Karolin, 2020. "Dismissal protection and long-term sickness absence: First evidence from Germany," ZEW Discussion Papers 20-040, ZEW - Leibniz Centre for European Economic Research.
    11. Pichler, Stefan & Ziebarth, Nicolas R., 2017. "The pros and cons of sick pay schemes: Testing for contagious presenteeism and noncontagious absenteeism behavior," Journal of Public Economics, Elsevier, vol. 156(C), pages 14-33.
    12. Nathalie Havet & Morgane Plantier, 2023. "The links between difficult working conditions and sickness absences in the case of French workers," LABOUR, CEIS, vol. 37(1), pages 160-195, March.
    13. Vincent Vandenberghe, 2020. "The Rather Limited Role Of Mental Ill Health In Driving Work Beyond 50," LIDAM Discussion Papers IRES 2020020, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    14. Gürtzgen, Nicole & Hiesinger, Karolin, 2020. "Dismissal Protection and Long-term Sickness Absence - First Evidence from Germany," IAB-Discussion Paper 202022, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    15. Pichler, Stefan & Ziebarth, Nicolas R., 2019. "Reprint of: The pros and cons of sick pay schemes: Testing for contagious presenteeism and noncontagious absenteeism behavior," Journal of Public Economics, Elsevier, vol. 171(C), pages 86-104.
    16. Claus Schnabel, 2022. "Presenteeism at the workplace," IZA World of Labor, Institute of Labor Economics (IZA), pages 495-495, May.
    17. Mark L. Bryan & Andrew M. Bryce & Jennifer Roberts, 2021. "The effect of mental and physical health problems on sickness absence," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(9), pages 1519-1533, December.

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    More about this item

    JEL classification:

    • I19 - Health, Education, and Welfare - - Health - - - Other
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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