Absenteeism is a widely observed phenomenon that has received a great deal of attention from academics who argue that it is an excellent proxy for individuals' attitude to work and commitment to their jobs. Unfortunately, very little of this work has been done by economists. The little economics that has been done has tended to view absenteeism as a measure of the supply of effort. Given the paucity of economic analysis on absenteeism, the psychology, sociology and management literature is reviewed to examine the extent to which their approach and that of an economist have common ground. Upon careful reading, it becomes evident these disciplines offer similar perspectives. Probably the most researched area of absenteeism is the relationship between absence and turnover. Although there is much contention as to what the relationship between these two phenomena should be, most researchers view this as a means to test the hypothesis of withdrawal. This thesis examines the problem somewhat differently and suggests that the approach of much of the empirical work is misguided. An alternative methodology to examine these phenomena is suggested and tested using a very large and detailed database. The results suggest there is a positive correlation between absence and turnover, although the relationship is more complex than described in the literature. One area where economists have made a great deal of theoretical progress is in the examination of why absence might vary across firms. The key insight is that production technology may affect the shadow cost of absence and if the costs of absence differ across firms, then there will be different levels of motivation to reduce it. It is argued that not only will the shadow cost of absence vary across firms, it will also vary over time and a theoretical model is developed to demonstrate this. There is a presumption in the literature that absenteeism is inversely related with the business cycle. However, the empirical work on the subject only models absence as a supply side phenomenon. This introduces a significant identification problem. At the very time when individuals are least likely to go absent, firms' demand for reliable labour will be at its lowest. The empirical work in the chapter models absence from both the supply and the demand side and the findings confirm that both play a significant role in determining absence. The finding that firms' demand for reliable labour may vary through the business cycle is novel and receives further investigation. The data is dissaggregated to determine the robustness of the relationship between demand side factors and the business cycle. At broad levels of disaggregation, the results remain quite strong, although there does appear to be a difference between unionised and nonunionised workers. At finer levels of dissaggregation the results are not as conclusive. This is attributed to the relatively small samples used to derive the individual absence series and the resulting increased volatility that emerges due increased variability from the use of small samples.

This paper establishes theoretical relations between the level of unemployment and the economic growth rate. In a model with a monopolistically competitive manufacturing sector and a competitive innovation sector, which both pay efficiency wages, we find that the unemployment rate exhibits an unambiguously negative impact on the long-run growth performance, as it reduces the innovative capacity of the economy. Only if efficiency levels are different across sectors, we can also establish a causal relation from the growth rate to the rate of unemployment, since less innovation shifts the burden to induce efficiency towards the manufacturing sector, thus fostering unemployment. (author's abstract) / Series: Department of Economics Working Paper Series

O objetivo dessa dissertação foi testar a existência de um trade-off entre supervisão e salário em uma firma do ramo metal mecânico brasileiro, chamada Bruning Tecnometal Ltda. Foram examinados e testados os efeitos sobre o desempenho e a produtividade dos trabalhadores após a uma alteração no grau de supervisão na linha de montagem de tanques de combustível em alumínio. A experiência do caso Bruning corrobora as hipóteses da teoria de salário eficiência (shirking), a qual aponta que um aumento no grau de supervisão reduz o “corpo mole” dos trabalhadores e o comportamento de moral hazard. Os resultados indicaram que existe uma relação negativa entre supervisão e salário, sendo assim, cabe à firma escolher entre aumentar a supervisão ou aumentar os salários para manter o mesmo nível de esforço. O estudo de caso da Bruning, assim, é consistente com as predições geradas pelo modelo shirking referente aos salários eficiência. / The objective of this dissertation was testing the existence of a trade-off between supervision and wages in a Brazilian metal mechanical industry, called Bruning Tecnometal Ltda. Were examined and analyzed the effects of employees performance and productivity who were facing a changing in the degree of supervision in the production line of aluminum fuel tanks. The experience of Bruning’s case strongly corroborates with the relevance of the theory of efficiency wages (shirking), which indicates that an increase in the degree of supervision reduces the shirking of workers and the behavior of moral hazard. The dissertation concludes that there is a negative relation between wages and supervision, so that, it is the company responsibility to choose between increasing supervision or raising wages, to maintain the same effort level. This case thus is consistent with the predictions generated by the model regarding the shirking efficiencywages.

O objetivo dessa dissertação foi testar a existência de um trade-off entre supervisão e salário em uma firma do ramo metal mecânico brasileiro, chamada Bruning Tecnometal Ltda. Foram examinados e testados os efeitos sobre o desempenho e a produtividade dos trabalhadores após a uma alteração no grau de supervisão na linha de montagem de tanques de combustível em alumínio. A experiência do caso Bruning corrobora as hipóteses da teoria de salário eficiência (shirking), a qual aponta que um aumento no grau de supervisão reduz o “corpo mole” dos trabalhadores e o comportamento de moral hazard. Os resultados indicaram que existe uma relação negativa entre supervisão e salário, sendo assim, cabe à firma escolher entre aumentar a supervisão ou aumentar os salários para manter o mesmo nível de esforço. O estudo de caso da Bruning, assim, é consistente com as predições geradas pelo modelo shirking referente aos salários eficiência. / The objective of this dissertation was testing the existence of a trade-off between supervision and wages in a Brazilian metal mechanical industry, called Bruning Tecnometal Ltda. Were examined and analyzed the effects of employees performance and productivity who were facing a changing in the degree of supervision in the production line of aluminum fuel tanks. The experience of Bruning’s case strongly corroborates with the relevance of the theory of efficiency wages (shirking), which indicates that an increase in the degree of supervision reduces the shirking of workers and the behavior of moral hazard. The dissertation concludes that there is a negative relation between wages and supervision, so that, it is the company responsibility to choose between increasing supervision or raising wages, to maintain the same effort level. This case thus is consistent with the predictions generated by the model regarding the shirking efficiencywages.

O objetivo dessa dissertação foi testar a existência de um trade-off entre supervisão e salário em uma firma do ramo metal mecânico brasileiro, chamada Bruning Tecnometal Ltda. Foram examinados e testados os efeitos sobre o desempenho e a produtividade dos trabalhadores após a uma alteração no grau de supervisão na linha de montagem de tanques de combustível em alumínio. A experiência do caso Bruning corrobora as hipóteses da teoria de salário eficiência (shirking), a qual aponta que um aumento no grau de supervisão reduz o “corpo mole” dos trabalhadores e o comportamento de moral hazard. Os resultados indicaram que existe uma relação negativa entre supervisão e salário, sendo assim, cabe à firma escolher entre aumentar a supervisão ou aumentar os salários para manter o mesmo nível de esforço. O estudo de caso da Bruning, assim, é consistente com as predições geradas pelo modelo shirking referente aos salários eficiência. / The objective of this dissertation was testing the existence of a trade-off between supervision and wages in a Brazilian metal mechanical industry, called Bruning Tecnometal Ltda. Were examined and analyzed the effects of employees performance and productivity who were facing a changing in the degree of supervision in the production line of aluminum fuel tanks. The experience of Bruning’s case strongly corroborates with the relevance of the theory of efficiency wages (shirking), which indicates that an increase in the degree of supervision reduces the shirking of workers and the behavior of moral hazard. The dissertation concludes that there is a negative relation between wages and supervision, so that, it is the company responsibility to choose between increasing supervision or raising wages, to maintain the same effort level. This case thus is consistent with the predictions generated by the model regarding the shirking efficiencywages.

This thesis extends the standard shirking model of efficiency wages to a continuum of effort levels. The generalisation completely overturns previous intuitions. In particular, the characteristic feature of the earlier theory that monitoring and pay are substitute instruments for motivating workers, no longer exists. This is remarkable, since such a negative correlation has been used as the primary empirical test for the existence of efficiency wages. With a continuum of effort levels, the efficiency wage model can also more conveniently be compared with conventional linear incentive wages. The most frequently recurring objection against the efficiency wage model is that unemployed workers should offer to pay entrance fees. This criticism is responded to in a model with finitely many periods. It is shown that the per period worker rents associated with efficiency wages strongly diminishes with the number of periods. It is further argued that both bonds and entrance fees are inferior means of extracting the remaining worker rents compared to investments in firm specific human capital. Finally, the above refinements of the efficiency wage theory are translated to fit in the arena of environmental economics and government policy. The corresponding results establish a rationale for a government to subsidise polluting firms and explain why a command and control policy is preferable to market-based incentive schemes. / Diss. Stockholm : Handelshögskolan, 1999