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Moral Hazard in a Mutual Health Insurance System: German Knappschaften, 1867–1914

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  • Guinnane, Timothy W.
  • Streb, Jochen

Abstract

The Knappschaft was a mutual association through which German miners insured themselves against accident, illness, and old age. The Knappschaft underlies Bismarck's sickness and accident insurance legislation, and thus Germany's system today. This article focuses on moral hazard, which plagued the Knappschaften in the later nineteenth century. Sick pay made it attractive for miners to feign illness that made them unable to work. We outline the moral hazard problem the Knappschaften faced as well as the mechanisms they devised to control it, and then use econometric models to demonstrate that those mechanisms were at best imperfect.

Suggested Citation

  • Guinnane, Timothy W. & Streb, Jochen, 2011. "Moral Hazard in a Mutual Health Insurance System: German Knappschaften, 1867–1914," The Journal of Economic History, Cambridge University Press, vol. 71(1), pages 70-104, March.
    • Handle: RePEc:cup:jechis:v:71:y:2011:i:01:p:70-104_00
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    Cited by:

    1. Timothy W. Guinnane & Jochen Streb, 2012. "Incentives that saved lives: Government regulation of accident insurance associations in Germany, 1884-1914," Working Papers 1013, Economic Growth Center, Yale University.
    2. Maria Stanfors & Tobias Karlsson & Lars‐Fredrik Andersson & Liselotte Eriksson, 2024. "Between voluntarism and compulsion: Membership in mutual health insurance societies in Swedish manufacturing, c. 1900," Economic History Review, Economic History Society, vol. 77(1), pages 244-267, February.
    3. Catarina Goulão & Luca Panaccione, 2015. "Pooling promises with moral hazard," Economics Bulletin, AccessEcon, vol. 35(1), pages 460-465.
    4. Timothy W. Guinnane, 2011. "The Historical Fertility Transition: A Guide for Economists," Journal of Economic Literature, American Economic Association, vol. 49(3), pages 589-614, September.
    5. Stanfors, Maria & Karlsson, Tobias & Andersson, Lars-Fredrik & Eriksson, Liselotte, 2022. "Membership in Mutual Health Insurance Societies: The Case of Swedish Manufacturing, circa 1900," Lund Papers in Economic History 238, Lund University, Department of Economic History.
    6. Guinnane, Timothy & Streb, Jochen, 2019. "Bismarck to no Effect: Fertility Decline and the Introduction of Social Insurance in Prussia," Working Papers 13, German Research Foundation's Priority Programme 1859 "Experience and Expectation. Historical Foundations of Economic Behaviour", Humboldt University Berlin.
    7. Elisabeth Bublitz & Michael Wyrwich, 2018. "Technological change and labor market integration," Jena Economics Research Papers 2018-008, Friedrich-Schiller-University Jena.
    8. Timothy W. Guinnane & Tobias A. Jopp & Jochen Streb, 2021. "Bismarcks Sozialversicherung und ihr Einfluss auf Deutschlands demografischen Wandel," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 101(4), pages 262-265, April.
    9. Lars Fredrik Andersson & Liselotte Eriksson, 2016. "Voluntary or compulsory? Exploring dynamics of mutual cooperative formation in Swedish health insurance at the turn of the twentieth century," Working Papers 16007, Economic History Society.
    10. Timothy Guinnane & Jochen Streb, 2012. "Incentives that Saved Lives: Government Regulation of Accident Insurance Associations in Germany, 1884–1914," Ruhr Economic Papers 0364, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    11. Lehmann-Hasemeyer, Sibylle & Streb, Jochen, 2017. "Does Social Security crowd out Private Savings? The Case of Bismarck’s System of Social Insurance," IBF Paper Series 06-17, IBF – Institut für Bank- und Finanzgeschichte / Institute for Banking and Financial History, Frankfurt am Main.
    12. Lehmann-Hasemeyer, Sibylle H. & Streb, Jochen, 2016. "Does Social Security Crowd Out Private Savings? The Case of Bismarck’s System of Social Insurance," Working Papers 1, German Research Foundation's Priority Programme 1859 "Experience and Expectation. Historical Foundations of Economic Behaviour", Humboldt University Berlin.
    13. repec:zbw:rwirep:0364 is not listed on IDEAS

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