IDEAS home Printed from https://ideas.repec.org/p/fer/wpaper/185.html

Moral Hazard and Adverse Selection in the Social Insurance Market for Entrepreneurs

Author

Listed:
  • Benzarti, Youssef
  • Harju, Jarkko
  • Matikka, Tuomas
  • Mattinen, Ella
  • Tazhitdinova, Alisa

Abstract

This paper studies social insurance contribution choices, adverse selection, and moral hazard among Finnish entrepreneurs. We exploit quasi-exogenous variation from a reform that relaxed mandatory contribution requirements for a subset of entrepreneurs, combining administrative registry data with linked survey evidence. Entrepreneurs who gained discretion reduced their contributions by 16%, on average, relative to entrepreneurs subject to a strict mandate. Using this variation, causal tests of anticipatory responses and moral hazard as well as positive correlation tests, we show that moral hazard and adverse selection effects are near zero in this market. Survey responses help illuminate the mechanisms underlying these results.

Suggested Citation

  • Benzarti, Youssef & Harju, Jarkko & Matikka, Tuomas & Mattinen, Ella & Tazhitdinova, Alisa, 2026. "Moral Hazard and Adverse Selection in the Social Insurance Market for Entrepreneurs," Working Papers 185, VATT Institute for Economic Research.
    • Handle: RePEc:fer:wpaper:185
    as

    Download full text from publisher

    File URL: https://www.doria.fi/handle/10024/194430
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fer:wpaper:185. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anita Niskanen (email available below). General contact details of provider: https://edirc.repec.org/data/vatttfi.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.