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The Effect Of Sickness On Earnings

  • Andrén, Daniela

    ()

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

  • Palmer, Edward

    ()

    (Uppsala University and National Social Insurance Board)

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.

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File URL: http://hdl.handle.net/2077/2898
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Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 45.

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Length: 36 pages
Date of creation: 23 May 2001
Date of revision:
Handle: RePEc:hhs:gunwpe:0045
Contact details of provider: Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/

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