In the December 2013 IMF Research Bulletin, the Research Summaries look at “Reforming Dual Labor Markets in Advanced Economies” (Giovanni Ganelli) and “Rating Through-The-Cycle: What Does the Concept Imply for Rating Stability Accuracy” (John Kiff, Michael Kisser, and Liliana Schumacher). The Q&A discusses Seven Questions on Financial Crises (Stijn Claessens, M. Ayhan Kose, Luc Laeven, and Fabián Valencia). This issue also includes a listing of recent IMF Working Papers and IMF Staff Discussion Notes, as well as Recommended Readings from the IMF Bookstore. The top-viewed articles from recent of issues of “IMF Economic Review” are featured.
Work absence is a part of an individual’s decision concerning hours worked. This paper focuses on sickness absence in Europe and builds on an analytical framework in which absence enters both labor supply and demand considerations, with sickness insurance provisions and labor market institutions affecting the costs of absence. The results from a panel of 18 European countries indicate that absence is higher under generous insurance systems and where employers bear little responsibility for their costs. Shorter working hours reduce absence, but flexible working arrangements are preferable if labor supply erosion is a concern.