Drivers of Effort: Evidence from Employee Absenteeism

53 Pages Posted: 7 Aug 2017 Last revised: 23 Aug 2017

See all articles by Morten Bennedsen

Morten Bennedsen

INSEAD - Economics and Political Sciences; University of Copenhagen - Department of Economics

Margarita Tsoutsoura

Cornell University; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); National Bureau of Economic Research (NBER)

Daniel Wolfenzon

Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER)

Date Written: July 25, 2017

Abstract

We use detailed information on individual absent spells of all employees in 4,140 firms in Denmark to document large differences across firms in average absenteeism. Using employees who switch firms, we decompose days absent into an individual component (e.g., motivation, work ethic) and a firm component (e.g., incentives, corporate culture). We find the firm component explains a large fraction of the difference in absenteeism across firms. We present suggestive evidence of the mechanisms behind the firm effect. After controlling for selection of employees into firms, family firm status and concentrated ownership are strongly correlated with decreases in absenteeism. Taken together, the evidence supports the importance of firm-level mechanisms in eliciting effort from existing employees.

Keywords: family firms; organizational structure; employee effort

JEL Classification: G00, G30, J24

Suggested Citation

Bennedsen, Morten and Tsoutsoura, Margarita and Wolfenzon, Daniel, Drivers of Effort: Evidence from Employee Absenteeism (July 25, 2017). INSEAD Working Paper No. 2017/53/EPS, Available at SSRN: https://ssrn.com/abstract=3012843 or http://dx.doi.org/10.2139/ssrn.3012843

Morten Bennedsen (Contact Author)

INSEAD - Economics and Political Sciences ( email )

Boulevard de Constance
F-77305 Fontainebleau Cedex
France

University of Copenhagen - Department of Economics ( email )

Ă˜ster Farimagsgade 5, Bygn 26
Copenhagen, 1353
Denmark

Margarita Tsoutsoura

Cornell University ( email )

Ithaca, NY 14853
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Daniel Wolfenzon

Columbia Business School - Finance and Economics ( email )

3022 Broadway
New York, NY 10027
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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