Are workers less absent when wage dispersion is small?

Benoît Mahy (Research Institute for Human development and Organisations (humanOrg), Université de Mons, Mons, Belgium)
François Rycx (Centre Emile Bernheim and DULBEA, Université libre de Bruxelles, Brussels, Belgium; IRES, Université catholique de Louvain, Louvain-la-Neuve, Belgium and IZA, Bonn, Germany,)
Mélanie Volral (Research Institute for Human development and Organisations (humanOrg), Université de Mons, Mons, Belgium)

International Journal of Manpower

ISSN: 0143-7720

Publication date: 3 May 2016

Abstract

Purpose

The purpose of this paper is to examine the impact of wage dispersion on sickness absenteeism observed in Belgian firms.

Design/methodology/approach

The authors use detailed linked employer-employee panel data for the period 1999-2006 that allow the authors to compute a conditional wage dispersion indicator following the Winter-Ebmer and Zweimüller (1999) methodology and to estimate the relationship between sickness absenteeism and wage dispersion while controlling for time-invariant workplace characteristics.

Findings

The authors find a positive and hump-shaped relationship between intra-firm wage dispersion and sickness absenteeism, the turning point of this relation being extremely high. In addition, the magnitude of the influence of wage dispersion on sickness absenteeism is found to be stronger in firms employing a larger share of blue-collar workers.

Practical implications

The results could therefore suggest that wage dispersion, suggestive of larger pay-for-performance mechanisms, decreases worker satisfaction and the workplace climate in general. Only a minority of workers, who are less sensitive to equity and cohesion considerations, would be less absent as pay-for-performance increases.

Originality/value

While numerous approaches analyse the link between wage dispersion and firm productivity, very few studies we are aware of are devoted to the relationship between wage dispersion and sickness absenteeism. Yet, the outcomes in terms of productivity and sickness absenteeism may be different. Furthermore, the influence of wage dispersion on sickness absenteeism does not seem unambiguous from a theoretical point of view. To the authors knowledge, it is the first time that this relation is analysed with Belgian data.

Keywords

Citation

Benoît Mahy, François Rycx and Mélanie Volral (2016) "Are workers less absent when wage dispersion is small?", International Journal of Manpower, Vol. 37 No. 2, pp. 197-209

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DOI

: https://doi.org/10.1108/IJM-01-2015-0004

Publisher

:

Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

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