Sick Pay Reforms and Health Status in a Unionised Labour Market

34 Pages Posted: 15 Dec 2016

See all articles by Laszlo Goerke

Laszlo Goerke

University of Trier - Institute of Labour Law and Industrial Relations in the European Union; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Multiple version iconThere are 3 versions of this paper

Date Written: November 15, 2016

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

JEL Classification: D620, I130, I180, J220, J510, J520

Suggested Citation

Goerke, Laszlo, Sick Pay Reforms and Health Status in a Unionised Labour Market (November 15, 2016). CESifo Working Paper Series No. 6177, Available at SSRN: https://ssrn.com/abstract=2885825

Laszlo Goerke (Contact Author)

University of Trier - Institute of Labour Law and Industrial Relations in the European Union ( email )

Behringstraße 21, 7. Floor, Building H
Trier, 54296
Germany

HOME PAGE: http://www.iaaeu.de/

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
8
Abstract Views
194
PlumX Metrics