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Do interactions between unemployment insurance and sickness insurance affect transitions to employment?

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Author Info
Hall, Caroline () (IFAU - Institute for Labour Market Policy Evaluation)

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Abstract

Previous research suggests that there are substantial interactions between the unemployment insurance (UI) and the sickness insurance (SI) in Sweden. Moral hazard arises in the interplay between these two social insurance systems, since by reporting sick an unemployed person can postpone the UI expiration date and sometimes also receive considerably higher benefits. This paper examines whether these interactions affect the transition rate from unemployment to employment. To study this question I utilize a reform which greatly reduced the incentives for unemployed persons to transfer to the SI. While there is evidence that this reform substantially lowered the incidence of sick reports among the unemployed, I find no evidence suggesting that the reduced sick report rate in turn affected the transition rate to employment

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File URL: http://www.ifau.se/upload/pdf/se/2008/wp08-18.pdf
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Publisher Info
Paper provided by IFAU - Institute for Labour Market Policy Evaluation in its series Working Paper Series with number 2008:18.

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Length: 37 pages
Date of creation: 03 Sep 2008
Date of revision:
Handle: RePEc:hhs:ifauwp:2008_018

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Postal: Labour Market Policy Evaluation, P O Box 513, SE-751 20 Uppsala, Sweden
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Related research
Keywords: Unemployment insurance; sickness insurance; unemployment duration; health; duration analysis;

Find related papers by JEL classification:
C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis
H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
J65 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment Insurance; Severance Pay; Plant Closings

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This page was last updated on 2009-12-3.

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