| Abstract: | Absence from work is a risky activity for an employed worker, as it may lead to dismissal and involuntary unemployment. The cost of unemployment to a worker depends, however, on absence behavior had the worker remained employed. Hence, absence decisions over time are interrelated. This article examines the dynamic and some comparative static aspects of the absence decision under uncertainty: the nature of its variation over time, its response to variations in the unemployment rate, and its alleged subjection to a moral hazard effect in the presence of an unemployment insurance program. |
