The aim of this paper is to examine educational inequalities in the risk of non-employment among people with illnesses and how they vary between European countries with different welfare state characteristics. In doing so, the paper adds to the growing literature on welfare states and social inequalities in health by studying the often overlooked 'sickness'-dimension of health, namely employment behaviour among people with illnesses. We use European Union Statistics on Income and Living Conditions (EU-SILC) data from 2005 covering 26 European countries linked to country characteristics derived from Eurostat and OECD that include spending on active labour market policies, benefit generosity, income inequality, and employment protection. Using multilevel techniques we find that comprehensive welfare states have lower absolute and relative social inequalities in sickness, as well as more favourable general rates of non-employment. Hence, regarding sickness, welfare resources appear to trump welfare disincentives.
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