SICK OF YOUR COLLEAGUES' ABSENCE?

We utilize a large-scale randomized social experiment to identify how co-workers affect each other's effort as measured by work absence. The experiment altered the work absence incentives for half of all employees living in Goteborg, Sweden. Using administrative data we are able to recover the treatment status of all workers in more than 3,000 workplaces. We first document that employees in workplaces with a high proportion of treated co-workers increase their own absence level significantly. We then examine the heterogeneity of the treatment effect in order to explore what mechanisms are underlying the peer effect. Although a strong effect of having a high proportion of treated co-workers is found for the non-treated workers, no significant effects are found for the treated workers. These results suggest that pure altruistic social preferences can be ruled out as the main motivator for the behavior of a non-negligible proportion of the employees in our sample.