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Does experience rating reduce sickness and disability claims? Evidence from policy kinks

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  • Kyyrä, Tomi
  • Paukkeri, Tuuli

Abstract

We study whether the experience rating of employers’ disability insurance premiums affects the inflow to disability benefits in Finland. To identify the causal effect of experience rating, we exploit kinks in the rule that specifies the degree of experience rating as a function of firm size. Using comprehensive matched employer–employee panel data, we estimate the effects of experience rating on the inflow to sickness and disability benefits. We find that experience rating has little or no effect on either of these outcomes.

Suggested Citation

  • Kyyrä, Tomi & Paukkeri, Tuuli, 2018. "Does experience rating reduce sickness and disability claims? Evidence from policy kinks," Journal of Health Economics, Elsevier, vol. 61(C), pages 178-192.
    • Handle: RePEc:eee:jhecon:v:61:y:2018:i:c:p:178-192
    DOI: 10.1016/j.jhealeco.2018.07.007
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    References listed on IDEAS

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    1. Petri Böckerman & Ohto Kanninen & Ilpo Suoniemi, 2018. "A kink that makes you sick: The effect of sick pay on absence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 33(4), pages 568-579, June.
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    Cited by:

    1. Koning, Pierre & van Lent, Max, 2022. "Workers' Moral Hazard and Insurer Effort in Disability Insurance," IZA Discussion Papers 15164, Institute of Labor Economics (IZA).
    2. Nynke de Groot & Pierre Koning, 2022. "A burden too big to bear? The effect of experience‐rated disability insurance premiums on firm bankruptcies and employment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 124(1), pages 214-242, January.
    3. Kyyrä, Tomi & Tuomala, Juha, 2023. "The effects of employers’ disability and unemployment insurance costs on benefit inflows," Labour Economics, Elsevier, vol. 85(C).
    4. Menezes-Filho, Naercio & Politi, Ricardo, 2020. "Estimating the causal effects of private health insurance in Brazil: Evidence from a regression kink design," Social Science & Medicine, Elsevier, vol. 264(C).

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    More about this item

    Keywords

    J14; J26; H32; Experience rating; Disability insurance; Early retirement;
    All these keywords.

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm

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