IDEAS home Printed from https://ideas.repec.org/p/hhs/gunwpe/0138.html
   My bibliography  Save this paper

The Effect of Past Sickness on Current Earnings in Sweden

Author

Listed:
  • Andrén, Daniela

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

  • Palmer, Edward

    () (Uppsala University and The Swedish National Social Insurance Board)

Abstract

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.

Suggested Citation

  • 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.
  • Handle: RePEc:hhs:gunwpe:0138
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/2077/2777
    Download Restriction: no

    References listed on IDEAS

    as
    1. Thomas DeLeire & Willard Manning, 2004. "Labor market costs of illness: prevalence matters," Health Economics, John Wiley & Sons, Ltd., vol. 13(3), pages 239-250.
    2. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 1-9.
    3. Edin, P.A. & Nynabb, J., 1992. "Gender Wage Differentials and Interrupted Work Careers : Swedish Evidence," Papers 1992-17, Uppsala - Working Paper Series.
    4. Currie, Janet & Madrian, Brigitte C., 1999. "Health, health insurance and the labor market," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 50, pages 3309-3416 Elsevier.
    5. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
    6. Andrén, Daniela & Palmer, Edward, 2001. "The Effect Of Sickness On Earnings," Working Papers in Economics 45, University of Gothenburg, Department of Economics.
    7. James W. Albrecht & Per-Anders Edin & Marianne Sundström & Susan B. Vroman, 1999. "Career Interruptions and Subsequent Earnings: A Reexamination Using Swedish Data," Journal of Human Resources, University of Wisconsin Press, vol. 34(2), pages 294-311.
    8. Haveman, Robert & Wolfe, Barbara & Kreider, Brent & Stone, Mark, 1994. "Market work, wages, and men's health," Journal of Health Economics, Elsevier, vol. 13(2), pages 163-182, July.
    9. Chirikos, Thomas N & Nestel, Gilbert, 1985. "Further Evidence on the Economic Effects of Poor Health," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 61-69, February.
    10. Theodore W. Schultz, 1960. "Capital Formation by Education," Journal of Political Economy, University of Chicago Press, vol. 68, pages 571-571.
    11. Michael Grossman, 1972. "The Demand for Health: A Theoretical and Empirical Investigation," NBER Books, National Bureau of Economic Research, Inc, number gros72-1.
    12. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66, pages 281-281.
    13. Michael Grossman, 1999. "The Human Capital Model of the Demand for Health," NBER Working Papers 7078, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    sickness history; reported hours of work; earnings and wage equations;

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:gunwpe:0138. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marie Andersson). General contact details of provider: http://edirc.repec.org/data/naiguse.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.