Worried sick? Sickness absence during organizational turmoil

Abstract

Sickness absence has risen over the past years in Norway. An explanation put forward is that a tougher labour market represents a health hazard, while a competing hypothesis predicts that loss of job security works as a disciplinary device. In this analysis we aim to trace a causal impact of organizational turmoil or job insecurity on sickness absence, applying a difference-in-difference approach. Utilizing a negative financial shock that hit specific employers and workplaces, we find that sickness absence decreased considerably in the following year. The decrease is substantially larger among males than among female employees.