Media Briefings

‘PRESENTEEISM’: Evidence from Germany that more than half of employees go to work when they should be off sick

  • Published Date: April 2015

Fear of the sack contributes to the majority of people going to work at least once a year when they should be taking a sickie. On average, people drag themselves out of their sick beds to go to work for more than a week a year. These area among the findings of new research on the German labour market by Boris Hirsch and colleagues to be presented at the Royal Economic Society’s 2015 annual conference.

Their analysis of so-called 'presenteeism' – being at work when it would be better to stay home –analyses survey data from Germany for 2012. They find that:

• 55% of workers went to work at least once when they should have called in sick.
• On average, they did this six times a year.
• Unhealthy workers, who are more likely to lose their jobs, went to work when they were sick for 17 more days than comparable healthy workers.
• Employees who have had their job for longer, and so have better job security, were more likely to take a sick day if they were ill.

Presenteeism arises from an unintended consequence of the incentives that employers use to discipline workers:

• If they pay higher wages to induce workers not to pretend to be sick, the threat of dismissal becomes more effective.
• If a worker is often absent from work, convincing labour courts that a dismissal is lawful will easier.

But both measures may also increase presenteeism among workers who are unhealthy or who have low job security. According to the authors, this is both stressful to workers and costly to employers, and so both workers and employers would be better off if presenteeism could be reduced. Co-author Boris Hirsch comments:

'Presenteeism is widespread in a large number of countries, and it is associated with significant costs to society.

‘Our analysis implies that presenteeism would be less severe if sick workers, who are afraid of being sacked, could credibly reveal their true health status to employers.'

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The threat of dismissal induces ill workers to show up at work when they should better have called in sick. This is among the findings of recent research by Boris Hirsch, Daniel Lechmann and Claus Schnabel to be presented at the Royal Economic Society’s 2015 annual conference.

In 2012, 55% of German workers at least once showed up at work when they should better have called in sick. On average, they did so on roughly six days in the preceding 12 months. This so-called ‘presenteeism’ is widespread in a large number of countries, and it is associated with significant costs to society.

Yet economic analyses of this phenomenon are still rare. To close this gap, the researchers provide a theoretical and empirical investigation into presenteeism from an economic perspective.

Their theory starts from two building blocks. The first is that employers typically possess imperfect information on the health status of their workers. Consequently, if a worker calls in sick, employers cannot rule out that the worker’s absence reflects taking a duvet day rather than bad health. To prevent healthy workers from calling in sick, employers have to provide incentives to these workers.

The second building block of their theory is that to dismiss a worker, an employer must be able to convince labour courts that the worker’s dismissal has been lawful. Arguably, convincing labour courts becomes easier the more often a worker has been absent from work.

Now, based on these two assumptions, an employer can use wages to induce healthy workers to show up at work, rather than calling in sick. If she pays higher wages to her workers, the threat of dismissal becomes more effective. For workers losing one’s job now involves a larger drop in income and they therefore reduce workplace absence to lower the probability of dismissal.

But the employer cannot distinguish healthy workers from sick workers, for whom workplace presence is actually hurtful. Hence, raising pay to induce healthy workers to show up at work comes along with providing incentives for sick workers to show up at work when they should better have called in sick.

The researchers’ empirical investigation rests on representative survey data for German workers in 2012. They find that workers in bad health had 17 more presenteeism days in 2012 than comparable workers with excellent health status.

Further, one more stressful working condition comes along with roughly three quarters more presenteeism days. These findings are in line with the theory: workers for whom workplace presence is more hurtful show nonetheless more presenteeism.

The researchers also find fewer presenteeism days for workers with high tenure with their current employer. In Germany, high-tenure workers are subject to more generous dismissal protection. Therefore, this result is likely to reflect the fact that the threat of dismissal is less effective for this group of workers who are harder to sack when absent from work.

From an economic point of view, presenteeism is inefficient, being stressful to workers and costly to employers. Both workers and employers would be better off if the extent of presenteeism could be reduced. The researchers’ analysis implies that presenteeism would be less severe if sick workers, who are afraid of being sacked, could credibly reveal their true health status to employers. Yet more specific recommendations may only become available through a better understanding of the driving factors of presenteeism.

ENDS


For further information, contact:
Boris Hirsch: boris.hirsch@fau.de
Romesh Vaitilingam: romesh@vaitilingam.com, +44 7768 661095