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The purpose of this study is to examine the effects of health on wages of Australian workers, with a focus on gender differences and the role of macroeconomic conditions in the effects.

The first 15 waves of the Household, Income and Labour Dynamics in Australia survey are used to estimate a wage model that accounts for the endogeneity of health, unobserved heterogeneity and sample selection bias.

The results show that, after accounting for the endogeneity of health, unobserved heterogeneity and sample selection bias, better health increases wages for Australian male workers, but not for female workers. The results also show that accounting for the endogeneity of health, unobserved heterogeneity and potential sample selection bias is important in estimating the effects of health on wages. In particular, a simple ordinary least squares estimator would underestimate the effect of health on wages for males, while overestimate it for females, and simply addressing the endogeneity of health using instrumental variables could overestimate the effect for both genders. It is also found that the effects of health on wages fall under depressed macroeconomic conditions, perhaps due to reduced job mobility and increased presentism during a recession.

This study adds to the international literature on the effects of health on wages by providing empirical evidence from Australia. The model applied to estimate the effects takes advantage of a panel dataset to address the bias resulting potentially from all the sources of the endogeneity of health, unobserved heterogeneity and sample selection. The results indeed show that failing to address these issues would substantially bias the estimated effects of health on wages.

In order to succeed in an action under the Equal Pay Act 1970, should the woman and the man be employed by the same employer on like work at the same time or would the woman still be covered by the Act if she were employed on like work in succession to the man? This is the question which had to be solved in Macarthys Ltd v. Smith. Unfortunately it was not. Their Lordships interpreted the relevant section in different ways and since Article 119 of the Treaty of Rome was also subject to different interpretations, the case has been referred to the European Court of Justice.

The Equal Pay Act 1970 (which came into operation on 29 December 1975) provides for an “equality clause” to be written into all contracts of employment. S.1(2) (a) of the 1970 Act (which has been amended by the Sex Discrimination Act 1975) provides:

Knight's Industrial Law Reports goes into a new style and format as Managerial Law This issue of KILR is restyled Managerial Law and it now appears on a continuous updating basis rather than as a monthly routine affair.

A distinction must be drawn between a dismissal on the one hand, and on the other a repudiation of a contract of employment as a result of a breach of a fundamental term of that contract. When such a repudiation has been accepted by the innocent party then a termination of employment takes place. Such termination does not constitute dismissal (see London v. James Laidlaw & Sons Ltd (1974) IRLR 136 and Gannon v. J. C. Firth (1976) IRLR 415 EAT).

This paper brings a European perspective to the mainly U.S.-based literature on the relationship between obesity and labour-market outcomes. Using micro-data on workers aged 50 and over from the newly developed SHARE database, the effects of obesity on employment, hours worked, and wages across 10 European countries were analysed. Pooling all countries, the results showed that being obese was associated with a significantly lower probability of being employed for both women and men. Moreover, the results showed that obese European women earned 10% less than their non-obese counterparts. For men, however, the effect was smaller in size and insignificant. Taking health status into account, obese women still earned 9% less. No significant effect of obesity on hours worked was obtained, however. Regressions by country-group revealed that the effects of obesity differed across Europe. For instance, the effect of obesity on employment was greatest for men in southern and central Europe, while women in central Europe faced the greatest wage penalty. The results in this study suggest that the ongoing rise in the prevalence of obesity in Europe may have a non-negligible effect on the European labour market.

An adverse health event can affect women’s work capacity as they need time to recover. The institutional framework in the Netherlands provides employment protection during the first two years after the diagnosis. In this study, we have assessed the extent to which women’s employment is affected in the short- and long term by an adverse health event. We have used administrative Dutch data which follow women aged 25 to 55 years for four years after a medical diagnosis. We found that diagnosed women start leaving employment during the protection period and four years later they were about one percentage point less likely to be employed. Women in permanent employment did not reduce their employment during the protection period and reduced their employment with less than 0.5 percentage points thereafter. Furthermore, we found minor adjustments in the working hours in the short term and no adjustments in the long term. Lastly, we found that for wages, and not for employment and hours, adjustments could be related to the severity of the health condition: women diagnosed with temporary health conditions experienced a short-term wage penalty of about 0.5–1.7 percent and those diagnosed with chronic and incapacitating conditions experienced a long-term wage penalty of about 0.5 percent, while women diagnosed with some chronic and nonincapacitating conditions, such as respiratory conditions, experienced no wage changes in the short or long term.

In the spirit of Polachek (1975) and the later work of Becker (1985) on the role of specialization within the family, we examine the relationship between fringe benefits and the division of labor within a married household. The provision of fringe benefits is complicated by their non-additive nature within the household, as well as IRS regulations that stipulate that they be offered in a non-discriminatory manner in order to maintain their tax-exempt status. We model family decisions within a framework in which one spouse specializes in childcare and as a result experiences a reduction in market productive capacity. Our model predicts that the forces toward specialization become stronger as the number of children increase, so that the spouse specializing in childcare will have some combination of lower wages, hours worked, and fringe benefits. We demonstrate that to the extent that labor markets are incomplete, the family is less likely to obtain health insurance from the employer of the spouse that specializes in childcare. Using data from the April 1993 CPS we find evidence consistent with our model.

This study analyses the effects of alcohol consumption on the labour market outcomes of older individuals. The data set used consists of five waves of the Health and Retirement Study. The results from models with a limited number of covariates indicate that there is a wage and earnings premium associated with alcohol use. This premium progressively diminishes as more individual-level controls are added to the standard earnings function. The data set is longitudinal which allows for estimation of individual-fixed-effects specifications. These results indicate that alcohol use does not have a positive effect on earnings and wages.

In this chapter, we investigate two-way causality between health and the hourly wage. We employ insights from the human capital and compensating wage differential models, a panel formed from the National Longitudinal Survey of Youth 1997, and dynamic panel estimation methods in this investigation. We adopt plausible specifications in which a change in health induces a change in the wage with a lag and a change in the wage induces a change in health, also with a lag. We uncover a causal relationship between two of the five measures of health and the wage in which a reduction in health leads to an increase in the wage rate in a panel of US young adults who had completed their formal schooling by 2006 and were continuously employed from that year through 2011. There is no evidence of a causal relationship running from the wage rate to health in this panel. The former result highlights the multidimensional nature of health. It is consistent with an extension of the compensating wage differential model in which a large amount of effort in one period is required to obtain promotions and the wage increases that accompany them in subsequent periods. That effort may cause reductions in health and to a negative effect of health in the previous period on the current period wage. In this framework, employees have imperfect information about the effort requirements of a particular job when they are hired, and employers have imperfect information about the amount of effort new hirers are willing to exert. The result is also consistent with a model in which investments in career advancement compete with investments in health for time – the ultimate scarce resource. The lack of a causal effect of the wage on health may suggest that forces that go in opposite directions in the human capital and compensating wage differential models offset each other.