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The Role of Employer-provided Sick Pay in Britain and Norway

Health and Labor Markets

ISBN: 978-1-78973-862-9, eISBN: 978-1-78973-861-2

Publication date: 11 July 2019


Higher replacement rates often imply higher levels of absenteeism, yet even in generous welfare economies, employers provide sick pay in addition to the public sick pay. Using comparative population-representative workplace data for Britain and Norway, we show that close to 50% of private sector employers in both countries provide sick pay in excess of statutory sick pay. However, the level of statutory sick pay is also much higher in Norway than in Britain. In both countries, private sick pay as well as other benefits provided by employers are chosen by employers in a way that maximizes profits having accounted for different dimensions of labor costs. Several health-related privately provided benefits are often bundled. In both countries easy-to-train workers, high turnover and risky work are linked to less extensive employer provision of extended sick leave and sick pay in excess of statutory sick pay. In contrast, the presence of a trade union agreement is strongly correlated with both the provision of private sick pay and extended sick leave in Britain but not in Norway. We show that the sickness absence rate is much higher in Norway than in Britain. However, the higher level of absenteeism in Norway compared to Britain relates to the threshold for statutory sick pay in the Norwegian public sick pay legislation. When we take this difference into account, no significant difference remains.




We thank the editors, two anonymous referees, the participants at the COPE2017-workshop in Zurich and at the IZA Workshop on Health and the Labor Market in Bonn 2017 for their fruitful discussions and helpful suggestions. We thank the Norwegian Research Council for funding (Grant Nos. 202647 and 227117) and the sponsors of the Workplace Employment Relations Survey 2011 (Department for Business Innovation and Skills, Acas, ESRC, and NIESR) and Britain Data Archive for access to the WERS data.


Bryson, A. and Dale-Olsen, H. (2019), "The Role of Employer-provided Sick Pay in Britain and Norway", Health and Labor Markets (Research in Labor Economics, Vol. 47), Emerald Publishing Limited, Leeds, pp. 227-252.



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