Andrén, Daniela () (Department of Economics, School of Economics and Commercial Law, Göteborg University) Palmer, Edward () (Uppsala University and The Swedish National Social Insurance Board)
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This paper examines whether sickness history affects annual earnings and/or hourly wages in Sweden, using a unique longitudinal database. If poor health makes people less productive, previous sickness is expected to have a negative effect on hourly wages. If poor health reduces people’s working capacity, but not their productivity, it is expected to decrease the hours worked, which implies lower annual earnings and no change in their hourly wage. The results indicate that people who are healthy in the current year but have a longer spell of sickness in previous years have lower earnings than persons who have no record of long-term sickness, and that the effect goes through hours of work rather than the wage rate. In addition, in the current year, sickness has a convex relationship with earnings, going through wages. Persons with lower (higher) wages have more (fewer) days of compensated absenteeism.
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Paper provided by Göteborg University, Department of Economics in its series Working Papers in Economics with number
138.
Length: 27 pages Date of creation: 28 Jun 2004 Date of revision: Handle: RePEc:hhs:gunwpe:0138
Contact details of provider: Postal: Department of Economics, School of Business, Economics and Law, Göteborg University Box 640, SE 405 30 GÖTEBORG, Sweden Phone: 031-773 10 00 Web page: http://www.handels.gu.se/econ/ More information through EDIRC
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Find related papers by JEL classification: I10 - Health, Education, and Welfare - - Health - - - General I12 - Health, Education, and Welfare - - Health - - - Health Production J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
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