PT  - JOURNAL ARTICLE
AU  - Lena Hensvik
AU  - Olof Rosenqvist
TI  - Keeping the Production Line Running
AID  - 10.3368/jhr.54.1.0516.7914R1
DP  - 2019 Jan 01
TA  - Journal of Human Resources
PG  - 200--224
VI  - 54
IP  - 1
4099  - http://jhr.uwpress.org/content/54/1/200.short
4100  - http://jhr.uwpress.org/content/54/1/200.full
SO  - J Hum Resour2019 Jan 01; 54
AB  - We postulate that the production losses from absence depend on firms’ ability to internally substitute for absent workers, incentivizing firms to keep absence low in jobs with few substitutes. Using Swedish employer–employee data we show that absence is substantially lower in such positions conditional on establishment and occupation fixed effects. The result is driven by employee adjustments of absence to substitutability, and sorting of low (high) absence workers into (out of) positions with few substitutes. These findings highlight that internal substitution insures firms against production disruptions and that absence costs are important aspects of firms’ hiring and separation decisions.