Analysing absence behaviour using event history models

This paper analyses the absence behaviour of a group of industrial workers. Part of their remuneration scheme comprises an experience rated sick-pay scheme (linking level of sickpay to past absence) which determines the cost of a day's absence for a worker, both contemporaneously and in terms of expected future cost. This cost is explicitly computed for each worker and we show that this cost is negatively related to absence. Using an event history model with a Markov structure for the absence histories the size of this effect is shown to depend on the state occupied. Copyright © 2004 John Wiley & Sons, Ltd.