Job security provisions and work hours

Abstract

This study explores the impact of job security provisions on workplace absence and overtime work. We hypothesize that job security provisions give individuals bargaining power to resolve work hour conflicts in their favour, but they may also create incentives for shirking. To examine the impact of job security provisions empirically, we implement a quasi-experimental research design based on a British job security provisions reform that extended dismissal protection among low-tenure workers. Using a difference-in-differences approach, we find that the reform increased absence rates due to workers taking more sickness absence and vacation days and reduced overtime work. Regarding the underlying mechanism, we obtain suggestive but limited evidence that the observed effects were driven both by reduced presenteeism and increased shirking.