This paper examines the redistributive effect of upper benefit limits (“ceilings”) in short term Bismarckian social insurance. Using data describing the Swedish sickness benefit we show that ceilings create a small redistribution at fairly high costs in terms of total utility and political sustainability. The simulation suggests that social insurance schemes with ceilings are politically more vulnerable to competition from private insurance markets than social insurance where the same amount of redistribution is produced by progressive taxes or higher universal benefits.
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Article provided by Finnish Society for Economic Research in its journal Finnish Economic Papers.
Volume (Year): 17 (2004) Issue (Month): 2 (Autumn) Pages: 73-78 Download reference. The following formats are available: HTML,
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Find related papers by JEL classification: H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
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