Sick Pay Reforms and Health Status in a Unionised Labour Market

Laszlo Goerke

No 10335, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We theoretically analyse the effects of sick pay and employees' health on collective bargaining, assuming that individuals determine absence optimally. If sick pay is set by the government and not paid for by firms, it induces the trade union to lower wages. This mitigates the positive impact on absence. Moreover, a union may oppose higher sick pay if it reduces labour supply sufficiently. Better employee health tends to foster wage demands. If the union determines both wages and sick pay, we identify situations in which it will substitute wages for sick pay because adverse absence effects can be mitigated.

Keywords: absence; employment; sick pay; trade union; wage determination (search for similar items in EconPapers)
JEL-codes: D62 I13 I18 J22 J51 J52 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2016-10
New Economics Papers: this item is included in nep-hea and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published - published in: Scottish Journal of Political Economy, 2017, 64(2), 115-142

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Related works:
Journal Article: Sick pay reforms and health status in a unionised labour market (2017)
Working Paper: Sick Pay Reforms and Health Status in a Unionised Labour Market (2016)
Working Paper: Sick Pay Reforms and Health Status in a Unionised Labour Market (2016)
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