Sick of change? Sickness absence following ownership conversions in Norwegian kindergartens

Abstract

The expansion of mixed-provider welfare systems has intensified debates about the consequences of public, nonprofit, and for-profit provision. Existing research focuses primarily on efficiency, service quality, and citizens' outcomes, while less is known about ownership conversions’ consequences for employees. We depart from research suggesting that ownership conversions can disrupt employee-organization value congruence as well as change the incentive structures. Leveraging population-wide administrative data from Norwegian childcare services (2015-2019), we examine whether ownership conversions are associated with changes in employee sickness absence. Using a staggered difference-in-differences design, we find that sickness absence increases following nonprofit-to-for-profit conversions. At the same time, public-to-for-profit transitions show little consistent relationship with sickness absence. These findings suggest that employee responses to ownership change are shaped less by the public-private divide than by differences in organizational missions and values. More broadly, the study highlights organizational value congruence as a potential mechanism linking ownership arrangements to employee well-being, and suggests that the nonprofit-for-profit boundary may be more consequential for employees than the conventional public-private divide.