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ABSTRACTThis paper explores a method of recovering the structural parameters of a Nash‐bargained model of household labour supply. It proceeds by computing the desired hours of labour supply numerically rather than analytically, thus circumventing the need for analytical tractability. This numerical procedure is then embedded in a conventional maximum‐likelihood estimation to obtain estimates of the structural preference parameters. An example using Family Expenditure Survey data is reported.

Absence rates are higher in large firms. This relationship between absence and firm size could possibly be explained if large firms had smaller unit cost of absence. We show, extending a method used by Weiss, that multiple‐line firms can be more efficient in insuring against absence through holding buffer‐stock workers than single‐line firms can. This suggests a theoretical underpinning of the observed relationship. An empirical investigation of the relationship between firm size and absence using German individual and firm data demonstrates the strength of the firm size effect on absence.

We present results of a negative binomial model on the determinants of the number of days of absence in a given year for a sample of 2049 workers drawn from three factories. We find evidence of the terms of the remuneration contract being important and we offer an interpretation of the differential effect of the company sickpay scheme on the behaviour of workers contracted to work four or five days a week.

We have benefitted from discussions with seminar participants at the Universities of Bath and Sheffield and with participants at the Institute for Labour Law and Industrial Relations in the European Union (IAAEU) Workshop on Absenteeism. We are also greatly indebted to the Editor of this journal for insightful comments. The normal disclaimer applies. ; Peer reviewed ; Postprint