Accident-Induced Absence from Work and Wage Growth

To analyze how short absences from work affect workers' labor trajectory, we use linked employer-employee administrative data from Hungary with rich administrative health records, and unexpected and mild accidents with no permanent labor productivity losses as exogenous drivers of short absences. Our Event Study results show that, relative to the counterfactual of no accident, short (1--5-months long) periods of absence after accidents decrease wages by 1 percent in the first two years after return to work, which are driven by missed internal promotions in small firms and missed opportunities to move to higher-paying firms for workers in large firms.