Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/252271 
Year of Publication: 
2022
Series/Report no.: 
IZA Discussion Papers No. 15147
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
When workers are in bad health, their productivity declines. We investigate whether the health of employees affects firm performance, taking advantage of the severity of the seasonal influenza seasons as a source of exogenous variation. We find that firms whose employees are particularly affected by influenza experience reductions in their return on assets and in net income. These results are not driven by firm-specific characteristics, as we find the same relationship between influenza severity and firm performance within firms, at the establishment level. We also document substantial heterogeneity in the effects, with small firms and labor-intensive firms driving our findings. This suggests that labor is an important driver of firm performance and that capital-intensive and larger firms are better able to shift resources in response to temporary shocks to their workforce. Back-of-the-envelope calculations suggest that smaller firms may be better off subsidizing vaccination programs for their employees.
Subjects: 
seasonal influenza
health shock
firm performance
JEL: 
L25
I12
G30
J31
Document Type: 
Working Paper

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