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Unemployment Insurance Generosity and Healthcare Use: Evidence from Sweden

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  • Päällysaho, Miika

Abstract

Unemployment can worsen health and increase healthcare use, creating fiscal externalities in publicly financed systems. Using Swedish register data on inpatient and outpatient care visits and drug purchases, measured as total costs rather than out-of-pocket payments, this paper estimates the effect of unemployment insurance (UI) generosity on healthcare use. Exploiting benefit caps in a regression kink design, I find no evidence that more generous UI affects healthcare use. Estimates rule out cost effects greater than 0.08 SEK per 1 SEK increase in benefits during the first 40 weeks after spell start. In Sweden’s generous welfare state, modest benefit increases do not to meaningfully alter the public healthcare costs of unemployment.

Suggested Citation

  • Päällysaho, Miika, 2026. "Unemployment Insurance Generosity and Healthcare Use: Evidence from Sweden," Working Papers 182, VATT Institute for Economic Research.
    • Handle: RePEc:fer:wpaper:182
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    File URL: https://www.doria.fi/handle/10024/194100
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    Keywords

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    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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