DT 01-23 Property Rights and Effort Supply

Direct evidence on how effort provision varies across different ownership structures remains scant. We investigate the absence behaviour of individuals employed in worker cooperatives, that is, in firms owned and ultimately controlled by their workforce. Leveraging employment data matched with certified sick leave records and exogenous variation in the generosity of the Uruguayan paid sick leave regime, we show that absenteeism differentially increased for individuals affected by the reform and employed in cooperatives. The effect is driven by members, both short-term and long-term absences, hard-to-diagnose (and, hence, more prone to moral hazard reporting problems) musculoskeletal conditions, and large cooperatives.