Professor of Economics
Family Firms; Organizational Structure; Employee Effort; Q21819;
The authors 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, they decompose days absent into an individual component (e.g., motivation, work ethic) and a firm component (e.g., incentives, corporate culture).The authors find the firm component explains a large fraction of the difference in absenteeism across firms. They 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.