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The Effect Of Sickness On Earnings

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  • Andrén, Daniela

    () (Department of Economics, School of Economics and Commercial Law, Göteborg University)

  • Palmer, Edward

    () (Uppsala University and National Social Insurance Board)

Abstract

The question addressed in this paper is whether sickness history affects annual earnings and hourly wages in Sweden. If poor health makes people less productive, we expect to find a negative effect of previous health history on hourly wages. If, instead, poor health reduces people´s working capacity, but not their productivity, this implies only a decrease in hours worked. Using a longitudinal database for individual sickness, we estimate both (annual) earnings and (hourly) wage equations, and find that people who are healthy in the current year, but have long-term sickness in the previous five years have lower earnings than persons without long-term sickness.

Suggested Citation

  • Andrén, Daniela & Palmer, Edward, 2001. "The Effect Of Sickness On Earnings," Working Papers in Economics 45, University of Gothenburg, Department of Economics.
  • Handle: RePEc:hhs:gunwpe:0045
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    File URL: http://hdl.handle.net/2077/2898
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    References listed on IDEAS

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    Cited by:

    1. Andrén, Daniela & Palmer, Edward, 2004. "The Effect of Past Sickness on Current Earnings in Sweden," Working Papers in Economics 138, University of Gothenburg, Department of Economics.
    2. Vikström, Johan, 2009. "The effect of employer incentives in social insurance on individual wages," Working Paper Series 2009:13, IFAU - Institute for Evaluation of Labour Market and Education Policy.

    More about this item

    Keywords

    human capital model; age-earnings profiles; earnings; wage equations; sickness spells; health variables.;

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • 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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