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Do Financial Bonuses to Employees Reduce Their Absenteeism? Outcome of a Lottery

Wolter Hassink () and Pierre Koning ()
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Wolter Hassink: Utrecht University

No 1644, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper investigates the effectiveness of a monthly lottery in reducing sick leave among workers in a manufacturing firm. Conditions of participation are not having reported sick in the previous three months and not having won the lottery earlier. It turns out that the lottery results in a decrease in the rate of sick leave of 1.6 percentage point. From the perspective of the firm, the lottery is found to be highly beneficial – that is, the benefits associated with the decrease in the sick leave rate exceed the costs of the lottery. Workers seem to be primarily driven by the first upcoming lottery. After winning the lottery, winners resume their previous (rate of) absence.

Keywords: absenteeism; sick leave; incentives; lottery (search for similar items in EconPapers)
JEL-codes: J22 J32 M52 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2005-06
New Economics Papers: this item is included in nep-bec
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Citations: View citations in EconPapers (4) Track citations by RSS feed

Published in: Industrial and Labor Relations Review, 2009, 62 (3), 327 - 342

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