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Long-term Illness and Wages

The Impact of the Risk of Occupationally Related Long-term Illness on Earnings

Long-term illness (LTI) is a more prevalent workplace risk than fatal accidents but there is virtually no evidence for compensating differentials for a broad measure of LTI. In 1990 almost 3.4 percent of the U.K. adult population suffered from a LTI caused solely by their working conditions. This paper provides the first estimates of compensating differentials for a broad measure of work-related LTI. Using data on self-reported illnesses we find significant CDs for male manual workers but none for male nonmanual workers. These results are robust to the addition of variables for the risk of accidental at-work deaths.