Sick-pay is a common provision in labor contracts. It insures workersagainst a sudden loss of income due to unexpected absences andhelps them smooth consumption. Therefore, many governments findsick-pay socially desirable and choose to mandate its provision. Butsick-pay is not without its...

This paper examines the effects of the Working Families´ Tax Credit (WFTC) on couples inBritain. We develop a simple model of household decisions which explicitly accounts for therole played by the tax and benefit system. Its main implications are then tested using paneldata from the British...