ABSTRACT
Corporate sabbaticals are a relatively recent human resource benefit, compared to academic practices. In academia, sabbaticals are used for such purposes as to refresh a professor's mental health, allow learning of a new subject, promote development of new techniques, doing research, etc. In the modern corporation, a sabbatical can be the pause that refreshes (Clark, 2006), the best defense against the post-Covid “Great Resignation” (Kadet, 2022), and an important benefit to recruit and retain high quality employees (Fields et al., 2006). There has always been a question whether an employee benefit is a cost or a benefit to the firm. This research takes the first investigation into the evaluation of the cost-benefit analysis of companies starting a sabbatical program. Using event study methods, the announcements of the initiation of corporate sabbatical programs result in significant positive abnormal returns. The increase in firm value is large, significant, and long-term.
Keywords
Sabbaticals, Event Study, Cumulative Abnormal Return, Firm Value