Essays on Employment Protection, Private Equity and Spousal Behavior

Abstract: This thesis consists of four papers, summarized as follows.“Employment Protection and Sickness Absence”An exemption in the Swedish Employment Security Act in 2001 allows employers with at most ten employees to exempt two workers from the seniority rule at times of redundancies. The exemption is found to decrease sickness absence by more than 13% at those establishments that were treated relative to those that were not and this was due to a behavioral, rather than a compositional, effect.“Employment Protection and Parental Childcare”I examine if employment protection affects parental childcare. I estimate that an increased dismissal risk reduces the total days of parental childcare by around six percent. The identification relies on a reform that made it easier for employers in Sweden to dismiss workers in small firms. Both a sorting effect and a behavioral effect can explain the reduced childcare. I also find that temporary parental leave is redistributed within households if only one partner was affected by the reform.“Private Equity and Employees”Using linked employer-employee data from Sweden, a difference-in-difference approach, and 201 private equity buyouts undertaken between 1998 and 2004, we show that unemployment risk declines and labor income increases for employees after a private equity buyout. A plausible explanation is relaxed financial constraints: the effects are strongest in industries dependent on external finance for growth, for non-divisional buyouts, and for buyouts just prior to 2001.“Temporary Disability Insurance and Spousal Labor Supply”We use a reform in the Swedish temporary disability insurance to show that the partner’s benefit level affects spousal labour supply: an eleven percent increase of the partner’s benefit level is estimated to prolong spousal sick spells with around eight percent, which corresponds to an elasticity of sick days with respect to the partner’s benefit of three-quarters of the own labor supply elasticity of unity.