How Much Does Absenteeism Cost?

This paper presents evidence on the output loss resulting from absenteeism. Hedonic wage equations are estimated over two different data sets-the 1972-1973 Quality of Employment Survey and the pooled May 1973-1975 Current Population Survey-to calculate the cost in terms of reduced output and increased labor costs per payroll hour. Also, a manufacturing production function is estimated to directly compute the productivity loss. The results indicate that the effect of absenteeism on output is quite small: a 10 percentage point increase in the absence rate is associated with at most a 2.1 percent decrease in the wage.