Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/149194
Authors: 
Goerke, Laszlo
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 10335
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.
Subjects: 
absence
employment
sick pay
trade union
wage determination
JEL: 
D62
I13
I18
J22
J51
J52
Document Type: 
Working Paper

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