Past work in sports economics has examined evidence of how the incentives created by contract structure influence player performance, specifically looking at two types of behavior. The contract year phenomenon refers to an increase in production in the final year of a player’s contract. The shirking effect refers to a reduction in performance in the early years of long-term contracts. While previous studies have investigated these effects separately, they are interrelated and should be integrated into a common analysis. I begin by testing for evidence of each effect independently, using various performance measures. I then combine my test of these phenomena into a single examination. Separate analysis produces weak evidence of a contract year phenomenon and strong evidence of a shirking effect. However, in the combined analysis, the contract year phenomenon drops out while the shirking effect persists. This suggests that the contract year phenomenon does not exist, and that evidence of it found in some previous studies may actually be due to a failure to incorporate the shirking effect in the analysis.

Background: The literature has traditionally seen shirking as a negative phenomenon that leads to the productivity loss of individuals and organizations and thus has to be confronted with the help of control in the form of monitoring. However, considering that in the nowadays popular virtual work setting the ability to apply some controls can be hindered and the ethicality of electronic performance monitoring is questioned, there is a need to rethink the established view on shirking and explore the role of trust in it. Aim: Examine how managerial controls and trust impact employees’ shirking in the virtual work setting through the lens of employees’ perceptions. Methodology: A qualitative study was conducted using semi-structured interviews. The interviewees are nine employees from various industries in Sweden who have less than 5 years of working experience in total and have been working within their last company for at least 6 months face-to-face and at least 6 months virtually under the supervision of one manager. Findings: The analysis revealed that employees who receive the control and trust that they want from their managers generally do not shirk, even with none or little monitoring when working virtually, but those who experience mismatches between control and trust wanted and received either tend to shirk or risk getting burnout and/or quitting the company. This highlights the importance of considering employees’ needs for both control and trust when addressing shirking in the virtual work setting. Moreover, a potential positive aspect of shirking was found in the way that occasional moderate shirking in combination with control and trust matches can have a positive impact on employees’ well-being and productivity in the long-term.

The overriding theme of my dissertation is the use of short-term weather fluctuations to study how people allocate their time across activities. In Chapter 1, a theoretical model is developed to distinguish malfeasant from legitimate forms of employee sickness absenteeism. In this model, individuals' marginal utility of indoor leisure is increasing in their sickness levels, while their marginal utility of outdoor leisure is an increasing function of the interaction of their health and the quality of outdoor weather. In equilibrium, sickness absenteeism occurs at both ends of the sickness distribution -- among the relatively sick and among the most healthy facing the best weather. The positive relation between marginal changes in weather quality and levels of sickness absenteeism in the workplace reflects the substitution of the inframarginal employees who are the least sick away from work activities towards outdoor leisure activities. The model in Chapter 1 suggests an empirical strategy to identify a shirking component in overall reported sickness absenteeism. Not only does this approach avoid attributing entirely legitimate forms of absenteeism to shirking, but unlike previous studies using employee dismissal rates, it is able to distinguish shirking activity whether or not that activity is detected by employers. In order to exploit exogenous weather fluctuations to identify shirking activity, we need a one-dimensional measure of weather “quality”. The primary objective of Chapter 2 is to construct a weather quality index that captures the influence of the weather on workers' preferences for outdoor leisure activity. The weather quality index takes into account the multifaceted nature of weather conditions, and measures how various weather elements -- temperature, humidity, precipitation, wind speed, and cloud cover -- come together to affect the propensity of employees to engage in high-utility outdoor recreational activities. The resulting index provides a ranking of different weather conditions in terms of their outdoor recreational values, which can then be used to capture the incentives of employees to shirk contractual work hours in response to purely exogenous weather changes. Chapter 3 empirically tests the existence of weather-induced substitution between work and outdoor leisure activities and examines how this type of behaviour varies across workers facing different shirking incentives. Linking 12 years of employee data from Canada's monthly Labour Force Survey (LFS), which queries reasons for employees' absences, to weather quality measured using the index constructed in Chapter 2, a clear positive relationship is found between the quality of outside weather conditions and short-term reported sickness absenteeism. Moreover, consistent with a key proposition of the theoretical model in Chapter 1, the empirical relation between weather and sickness absenteeism tends to be larger when existing shirking incentives are low, such as when sick pay is less generous and when probability of getting fired if caught shirking is high. There is, however, little evidence that firms are able to adjust shirking incentives through the payment of efficiency wages. Finally, Chapter 4 examines another type of substitution induced by weather shocks -- the substitution between outdoor and indoor physical activities. The Chapter begins with a theoretical model of the decision to participate in physical activities, which assumes that when adverse weather shocks deter outdoor physical activities, indoor physical activities are the only viable option for individuals to stay physically active. However, because the indoor options are more costly, substituting from outdoor to indoor physical activities is easier for higher-income individuals. This suggests an explanation for the stylized fact that rates of physical activity participation are low among lower socioeconomic groups. Linking time-use data from Canadian General Social Survey with archival weather data, the results of the empirical analysis in this chapter provides evidence of a positive income effect enabling substitution from outdoor to indoor physical activities when outside weather is not conducive for participating in outdoor activities. By exploiting the role that income plays in maintaining physical activity levels when less costly outdoor options are limited, this chapter formally illustrates a credible causal link between people's income levels and their participation in leisure time physical activities and provides direct evidence of this link. The results have important policy implications for promoting physical activities, especially among lower income population.

The overriding theme of my dissertation is the use of short-term weather fluctuations to study how people allocate their time across activities. In Chapter 1, a theoretical model is developed to distinguish malfeasant from legitimate forms of employee sickness absenteeism. In this model, individuals' marginal utility of indoor leisure is increasing in their sickness levels, while their marginal utility of outdoor leisure is an increasing function of the interaction of their health and the quality of outdoor weather. In equilibrium, sickness absenteeism occurs at both ends of the sickness distribution -- among the relatively sick and among the most healthy facing the best weather. The positive relation between marginal changes in weather quality and levels of sickness absenteeism in the workplace reflects the substitution of the inframarginal employees who are the least sick away from work activities towards outdoor leisure activities. The model in Chapter 1 suggests an empirical strategy to identify a shirking component in overall reported sickness absenteeism. Not only does this approach avoid attributing entirely legitimate forms of absenteeism to shirking, but unlike previous studies using employee dismissal rates, it is able to distinguish shirking activity whether or not that activity is detected by employers. In order to exploit exogenous weather fluctuations to identify shirking activity, we need a one-dimensional measure of weather “quality”. The primary objective of Chapter 2 is to construct a weather quality index that captures the influence of the weather on workers' preferences for outdoor leisure activity. The weather quality index takes into account the multifaceted nature of weather conditions, and measures how various weather elements -- temperature, humidity, precipitation, wind speed, and cloud cover -- come together to affect the propensity of employees to engage in high-utility outdoor recreational activities. The resulting index provides a ranking of different weather conditions in terms of their outdoor recreational values, which can then be used to capture the incentives of employees to shirk contractual work hours in response to purely exogenous weather changes. Chapter 3 empirically tests the existence of weather-induced substitution between work and outdoor leisure activities and examines how this type of behaviour varies across workers facing different shirking incentives. Linking 12 years of employee data from Canada's monthly Labour Force Survey (LFS), which queries reasons for employees' absences, to weather quality measured using the index constructed in Chapter 2, a clear positive relationship is found between the quality of outside weather conditions and short-term reported sickness absenteeism. Moreover, consistent with a key proposition of the theoretical model in Chapter 1, the empirical relation between weather and sickness absenteeism tends to be larger when existing shirking incentives are low, such as when sick pay is less generous and when probability of getting fired if caught shirking is high. There is, however, little evidence that firms are able to adjust shirking incentives through the payment of efficiency wages. Finally, Chapter 4 examines another type of substitution induced by weather shocks -- the substitution between outdoor and indoor physical activities. The Chapter begins with a theoretical model of the decision to participate in physical activities, which assumes that when adverse weather shocks deter outdoor physical activities, indoor physical activities are the only viable option for individuals to stay physically active. However, because the indoor options are more costly, substituting from outdoor to indoor physical activities is easier for higher-income individuals. This suggests an explanation for the stylized fact that rates of physical activity participation are low among lower socioeconomic groups. Linking time-use data from Canadian General Social Survey with archival weather data, the results of the empirical analysis in this chapter provides evidence of a positive income effect enabling substitution from outdoor to indoor physical activities when outside weather is not conducive for participating in outdoor activities. By exploiting the role that income plays in maintaining physical activity levels when less costly outdoor options are limited, this chapter formally illustrates a credible causal link between people's income levels and their participation in leisure time physical activities and provides direct evidence of this link. The results have important policy implications for promoting physical activities, especially among lower income population.

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.

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Social benefits were forecasted to increase by 13 percent to 2022 before the pandemic hit the economy (Prop. 2018/19:1). In the latest forecast it has almost doubled: an increase of 24 percent to 2022 (Prop. 2020/21:1). Youths and immigrants are particularly affected by the downturn, especially since labor market sectors were both groups often have their first job are in the center of attention for government restrictions to lower the spread of Covid-19. These two groups are overrepresented among social benefit recipients when being unemployed (Socialstyrelsen, 2020), since they have not qualified to national unemployment insurances (Rosengren, 2017). The municipal social assistance was intended to be the outermost safety net. Though the transfer should be short-term, over 40 percent of the households receiving social benefits do it for more than ten months, and the share increases[1]. Social benefit could now be considered a complement to national transfers and an extra unemployment benefit for those who are not eligible for the national social safety system on the labor market. Municipalities are allowed to demand participation in different activities – henceforth called activation – as a prerequisite for social benefit eligibility. Under the assumption of full-time activation for social benefit recipients, the difference in leisure between employment or unemployment with activation is zero (0). This affect the cost of labor for the individual, which is usually partly described as the relative value of leisure (non-monetary costs). If it does not cost any leisure to leave unemployment for employment, the disutility of work decrease. Social benefits also reimburse monetary labor costs, such as commuting, wherefore there is no difference in fixed labor costs either. Differences in disposable income is then the only remaining variable to decide the individuals labor supply, according to conventional labor market theory; if the disposable income when working exceed the disposable income when not working, the individual should work. A social benefit recipient is eligible for the job stimulus after six months of social benefit dependency, giving a 25 percent earnings disregard on the net labor income. This is an exception from the usual one-to-one discount (or 100 percent marginal effect) on the transfer when receiving other incomes, such as national transfers or wage. The stimulus is intended to increase the incentives for working and motivate those who are long-term recipients to be active on the labor market[2]. During this time period, all recipients have a larger disposable income if working compared to not working – combined with the other assumptions above, this means all recipients should work when being eligible for job stimulus. Available data (Socialstyrelsen, 2016) shows only 1.8 percent of all recipients actually had labor incomes and got the earnings disregard, inferring a deviation from the expectations of common labor market theory. Meaning there could be an unknown variable in the utility function, decreasing the utility from working more than the utility increase from the job stimulus. There are a variety of possible explanations, such as asymmetric information, stigmatization, matching problems et cetera. In this thesis, the focus will be effort. This is the explanation closest to the standard model, where the disutility of lost leisure due to labor is the centerpiece. In my previous thesis (Rosengren, 2019), I introduced a draft of an effort model. In this model, working came with a larger effort than activation giving rise to a disutility. The income differential needs to exceed the cost of the extra effort if the individual should choose to work. Expanding the standard model could provide a more sufficient tool for analyzing labor market participation and employment effects in the social benefit system. This thesis provides a model for analyzing the individual’s decision on the extensive margin – to work or not to work – in transfer systems, with regard to effort, shirking and effective leisure. I simulate the effort level corresponding to the share of social benefit recipients observed to have labor income during the job stimulus spell. Finding the effort in activation being approximately 71.5 percent of the effort when employed. I also forecast the effect of the planned increase in the job stimulus from 25 to 50 percent by the same simulation; 1 percent of the social benefit recipients are expected to leave activation for employment due to the doubled job stimulus. I optimize effort (from the policy-maker’s perspective) at different skill levels to find the effort level were all will supply labor. If enforcing 99.65 percent effort 83.44 percent are expected to leave activation for work. / Allt fler arbetslösa försörjer sig på ekonomiskt bistånd istället för de statliga arbetslöshetsersättningarna. Ekonomiskt bistånd eller försörjningsstöd är inte utformat med drivkrafter för arbete i beaktande. Exempelvis får den som tar emot bidraget inget utbyte av att börja arbeta förrän arbetsinkomsten överstiger försörjningsstödsnormen. För ett hushåll med två vuxna och fyra barn innebär det ca 30 000 SEK efter skatt. Finns det dessutom inga aktivitetskrav förlorar hushållet samtidigt fritid av att börja arbeta. Jobbstimulansen infördes för att få drivkrafter för arbete i försörjningsstödet. Det innebär att den som haft ekonomiskt bistånd i sex månader och börjar arbeta får behålla 25 procent av nettoinkomsten, istället för att bidraget minskar krona för krona när löneinkomsten ökar. Under antagandet om heltidsaktivering för försörjningsstödsmottagare är den tillgängliga fritiden lika för den som arbetar och för den som är arbetslös, därmed är den rörliga kostnaden av att arbeta lika. Eftersom försörjningsstödet kompenserar för eventuella kostnader som uppstår för den som börjar jobba, såsom förskoleavgift eller pendlingskostnader, påverkas inte disponibelinkomsten av fasta kostnader för att arbeta heller. Försörjningsstödsmottagare med jobbstimulans och heltidsaktivering kan således tjäna mer pengar och därmed öka sin nytta, utan att öka sin onytta (eftersom fritiden är oförändrad), genom att börja arbeta. Utifrån arbetsutbudsteori skulle förväntan vara att alla skulle börja arbeta under sådana förutsättningar. Trots det visar en uppföljning att bara 1,8 procent arbetar. Det kan finnas olika förklaringar till att så få börjar arbeta; bristande information om jobbstimulansen, sök- och matchningsproblem och så vidare. I den här uppsatsen prövas skillnader i ansträngning genom att anpassa en modell för arbetsutbud till det svenska socialbidragssystemet, och ge bidragstagare möjlighet att lata sig eller skolka i aktiveringen – inspirerat av den etablerade shirking theory – för att utöka sin effektiva fritid. Studier visar att människor upplever skolk eller lathet som substitut till ledighet. Även om den faktiska fritiden är densamma för den som arbetar och den som är arbetslös men deltar i aktivering, kan skillnader i ansträngning därmed innebära att den effektiva fritiden skiljer sig. När den som kan få jobbstimulans ska börja arbeta innebär det då en minskad effektiv fritid, och därmed en onytta eller upplevd kostnad av arbete. Försörjningsstödsmottagaren väljer sin ansträngning, som ger upphov till olika mycket onytta beroende på individens färdigheter där den med mer färdigheter har en lägre onytta av arbete eller ansträngning. Om personen arbetar eller inte beror på om den ökade nyttan av att börja arbeta med jobbstimulans överträffar onyttan av den minskade effektiva fritiden av att börja arbeta, givet individens färdigheter. I uppsatsen undersöks effekten av förändringar i olika variabler – ansträngning, färdighet och jobbstimulans – och jag finner att jobbstimulansen bara påverkar nyttan på marginalen, i jämförelse med stora effekter av ökad ansträngning eller ökade färdigheter. Vidare simuleras vilken ansträngningsnivå som korresponderar med att 1,8 procent arbetar och därmed har större nytta av jobbstimulansen än av den extra effektiva fritiden. Det visar sig att ansträngningen i aktiveringen verkar vara 71,5 procent jämfört ansträngningen på ett jobb. Om jobbstimulansen fördubblas, till en offentligfinansiell kostnad av 100 miljoner SEK, ökar andelen som börjar jobba bara med drygt en procentenhet vid bibehållen ansträngningsnivå. I uppsatsen beräknar jag även optimal ansträngningsnivå för att alla vid en viss färdighetsnivå ska börja arbeta. Det visar sig att om ansträngningsnivån höjs med knappt 20 procentenheter till 90 procent, skulle andelen som börjar arbeta stiga från 1,8 procent till 51 procent. Utöver dessa nya tillskott – förklaringsmodeller och resultat – till fältet, innehåller uppsatsen dessutom förslag på empiriska tester av andra förklaringar. För att genomföra simuleringar och kalkyleringar, har en modell över det svenska bidrags- och skattesystemet byggts i Matlab. Även den är att betrakta som ett tillskott.