The healthy fright of losing a good one for a bad one

- We study changes in employment protection (EPL) on absenteeism.
- We focus on permanent vs two types of temporary contract transitions.
- We use individual-level panel data and find asymmetric responses to changes in EPL.
- Significant overreaction of permanent workers is observed when they lose protection.
- Findings are in line with psychological explanations of asymmetric reactions to good vs bad news.