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Benefit shifting: The case of sickness insurance for the unemployed

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  • Henningsen, Morten
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    Abstract

    This study describes the probability of transition from unemployment with unemployment insurance (UI) to sickness insurance (SI), using a proportional hazard duration model and a large register-based dataset. The combination of limited UI duration and the fact that SI rights do not depend on remaining UI, creates an incentive to use SI to effectively extend UI. The separate effects of elapsed unemployment duration and of UI duration on hazard rates are identified through a reform of the UI system. The estimated hazard rate for transition from unemployment to SI increases sharply the last months before UI exhaustion. The spikes are larger for diagnosis for mental illness, and vary across individuals, but are present for all groups and all diagnoses.

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    Bibliographic Info

    Article provided by Elsevier in its journal Labour Economics.

    Volume (Year): 15 (2008)
    Issue (Month): 6 (December)
    Pages: 1238-1269

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    Handle: RePEc:eee:labeco:v:15:y:2008:i:6:p:1238-1269

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    Web page: http://www.elsevier.com/locate/labeco

    Related research

    Keywords: Unemployment insurance Sickness insurance Unemployment duration Benefit shifting;

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    Cited by:
    1. Reiso, Katrine Holm, 2014. "The Effect of Welfare Reforms on Benefit Substitution," Discussion Paper Series in Economics 22/2014, Department of Economics, Norwegian School of Economics.

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