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...

Traditionally, it has been argued that profit sharing can increase employment and welfare because it lowers marginal labour costs without reducing total cost or labour income. In this paper, we show that profit sharing can also represent a Pareto-improvement if labour supply is excessive due to...

We investigate the causal effect of commuting on sickness absence from work using German panel data. To address reverse causation, we use changes in commuting distance for employees who stay with the same employer and who have the same residence during the period of observation. In contrast to...

A large number of articles have analysed 'the one constant' in the economic effects of trade unions, namely that collective bargaining reduces employment growth by two to four percentage points per year. Evidence is, however, mostly related to Anglo-Saxon countries. We investigate whether a...

Status considerations with respect to consumption give rise to negative externalities because individuals do not take into account that their decisions affect the relative consumption position of others. Further, status concerns create incentives for excessive labour supply in competitive...

Work effort varies greatly across employees, as evidenced by substantial differences in absence rates. Moreover, absenteeism causes sizeable output losses. Using data from the European Community Household Panel (ECHP), this paper investigates absence behavior of family employees, i.e. workers...

In 1996, statutory sick pay was reduced for private sector workers in Germany. Using the empirical observation that trade union members are dismissed less often than non-members, we construct a model to predict how absence behaviour will respond to the sick pay reform. We show that union members...

A large body of evidence suggests that social comparisons matter for workers' valuation of the wage they receive. The consequences of social comparisons in imperfectly competitive labor markets are less well understood. We analyze an oligopsonistic model of the labor market where workers derive...