Volume 18, Number 3 (Summer) 1983
Allen, Steven G. 1983. "How Much Does Absenteeism Cost?" Journal of Human Resources 18(3):379-393.
This paper presents evidence on the output loss resulting from absenteeism. Hedonic wage equations are estimated over two different data sets-the 1972-1973 Quality of Employment Survey and the pooled May 1973-1975 Current Population Survey-to calculate the cost in terms of reduced output and increased labor costs per payroll hour. Also, a manufacturing production function is estimated to directly compute the productivity loss. The results indicate that the effect of absenteeism on output is quite small: a 10 percentage point increase in the absence rate is associated with at most a 2.1 percent decrease in the wage.
The author is Assistant Professor of Economics, North Carolina State
University.
This article extends results reported in my doctoral dissertation. I am
especially grateful to Ron Gallant who helped develop the procedure for
eliminating measurement error bias. I have received helpful comments from
Richard Freeman, James Medoff, Dan Sumner, and two anonymous referees, as well
as workshop participants at North Carolina State University and the University
of North Carolina at Chapel Hill. Elizabeth Amos and Harriet Mc-Laughlin at N.C.
State and Marty VanDenburgh at Harvard greatly facilitated the empirical work
with their programming assistance. The research was supported by Grant No.
91-25-77-01 from the Employment and Training Administration, U.S. Department of
Labor. The author assumes responsibility for all remaining errors.
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