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Harmonizing unemployment and sickness insurance: Why (not)?

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  • Larsson, Laura

    ()
    (IFAU - Institute for Labour Market Policy Evaluation)

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    Abstract

    The paper discusses harmonization of unemployment insurance (UI) and sickness insurance (SI). The focus is on the difference between the benefit ceilings in the two insurance systems that has been shown to affect the behavior among unemployed SI recipients. The four conclusions are: (i) It is difficult to argue that the design with different benefit ceilings of UI and SI would be optimal. (ii) During the study period 1998–2001, unemployed were overrepresented among SI recipients. (iii) Some of the overrepresentation is due to the different benefit ceilings. Thus, harmonization of the systems is motivated; (iv) In a complex system as the Swedish social insurance system, reducing moral hazard in one group probably also implies various indirect effects. When designing a reform, all insurances should be considered simultaneously.

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    File URL: http://www.ifau.se/upload/pdf/se/2004/wp04-08.pdf
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    Bibliographic Info

    Paper provided by IFAU - Institute for Evaluation of Labour Market and Education Policy in its series Working Paper Series with number 2004:8.

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    Length: 40 pages
    Date of creation: 03 Jun 2004
    Date of revision:
    Publication status: Published in Swedish Economic Policy Review, 2004, pages 151-188.
    Handle: RePEc:hhs:ifauwp:2004_008

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    Postal: IFAU, P O Box 513, SE-751 20 Uppsala, Sweden
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    Related research

    Keywords: Government policies; moral hazard; sickness insurance; unemployment insurance;

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    References

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    1. Carling, Kenneth & Holmlund, Bertil & Vejsiu, Altin, 1999. "Do benefit cuts boost job findings? Swedish evidence from the 1990s," Working Paper Series 1999:8, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    2. Holmlund, B. & Kolm, A.S., 1995. "Progressive Taxation, Wage Setting and Unemployment - Theory and Swedish Evidence," Papers 15, Uppsala - Working Paper Series.
    3. Edin, P.-A. & Fredriksson, P., 2000. "LINDA - Longitudinal INdividual DAta for Sweden," Papers 2000-19, Uppsala - Working Paper Series.
    4. Taslimi, Mohammad, 2003. "Optimal Earnings-Related Unemployment Benefits," Working Paper Series 2003:16, Uppsala University, Department of Economics.
    5. Holmlund, B., 1997. "Unemployment Insurance in Theory and Practice," CEPR Discussion Papers 380, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    6. Barmby, T A & Orme, C D & Treble, John G, 1991. "Worker Absenteeism: An Analysis Using Microdata," Economic Journal, Royal Economic Society, vol. 101(405), pages 214-29, March.
    7. Broström, Göran & Palme, Mårten & Johansson, Per, 2002. "Economic incentives and gender differences in work absence behavior," Working Paper Series 2002:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    8. Currie, Janet & Madrian, Brigitte C., 1999. "Health, health insurance and the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 50, pages 3309-3416 Elsevier.
    9. Palme, Mårten & Svensson, Ingemar, 2002. "Pathways to Retirement and Retirement Incentives in Sweden," Arbetsrapport 2002:9, Institute for Futures Studies.
    10. Magnus Henrekson & Mats Persson, 2004. "The Effects on Sick Leave of Changes in the Sickness Insurance System," Journal of Labor Economics, University of Chicago Press, vol. 22(1), pages 87-114, January.
    11. Barmby, Tim & Sessions, John G & Treble, John G, 1994. " Absenteeism, Efficiency Wages and Shirking," Scandinavian Journal of Economics, Wiley Blackwell, vol. 96(4), pages 561-66.
    12. Atkinson, Anthony B & Micklewright, John, 1991. "Unemployment Compensation and Labor Market Transitions: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 29(4), pages 1679-1727, December.
    13. Brown, Sarah & Sessions, John G, 1996. " The Economics of Absence: Theory and Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 10(1), pages 23-53, March.
    14. Fredriksson, Peter & Holmlund, Bertil, 2003. "Improving incentives in unemployment insurance: A review of recent research," Working Paper Series 2003:5, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    15. Allen, Steven G, 1981. "An Empirical Model of Work Attendance," The Review of Economics and Statistics, MIT Press, vol. 63(1), pages 77-87, February.
    16. Stephen Nickell & D Nicolitsas, 1994. "Wages," CEP Discussion Papers dp0219, Centre for Economic Performance, LSE.
    17. Alan B. Krueger & Bruce D. Meyer, 2002. "Labor Supply Effects of Social Insurance," NBER Working Papers 9014, National Bureau of Economic Research, Inc.
    18. Johansson, Per & Palme, Mårten, 2001. "Assessing the effect of public policy on worker absenteeism," Working Paper Series 2002:13, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    19. Johansson, Per & Palme, Marten, 1996. "Do economic incentives affect work absence? Empirical evidence using Swedish micro data," Journal of Public Economics, Elsevier, vol. 59(2), pages 195-218, February.
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    Cited by:
    1. van den Berg, Gerard J & Lindeboom, Maarten & Dolton, Peter J, 2004. "Survey non-response and unemployment duration," Working Paper Series 2004:12, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    2. Söderström, Martin & Uusitalo, Roope, 2005. "School choice and segregation: evidence from an admission reform," Working Paper Series 2005:7, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    3. Cantoni, Eva & de Luna, Xavier, 2004. "Non-parametric adjustment for covariates when estimating a treatment effect," Working Paper Series 2004:9, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    4. Caroline Hall & Laura Hartman, 2010. "Moral hazard among the sick and unemployed: evidence from a Swedish social insurance reform," Empirical Economics, Springer, vol. 39(1), pages 27-50, August.

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