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Harmonizing unemployment and sickness insurance: Why (not)?

  • Larsson, Laura

    ()

    (IFAU - Institute for Labour Market Policy Evaluation)

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    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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    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
    Contact details of provider: Postal: IFAU, P O Box 513, SE-751 20 Uppsala, Sweden
    Phone: (+46) 18 - 471 70 70
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    1. Peter Fredriksson & Bertil Holmlund, 2006. "Improving Incentives in Unemployment Insurance: A Review of Recent Research," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 357-386, 07.
    2. 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.
    3. Per Johansson & Mårten Palme, 2002. "Assessing the Effect of Public Policy on Worker Absenteeism," Journal of Human Resources, University of Wisconsin Press, vol. 37(2), pages 381-409.
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    5. Holmlund, B. & Kolm, A.S., 1995. "Progressive Taxation, Wage Setting, and Unemployment , Theory and Swedish Evidence," Papers 1995-15, Uppsala - Working Paper Series.
    6. Holmlund, B., 1997. "Unemployment Insurance in Theory and Practice," Papers 1997-25, Uppsala - Working Paper Series.
    7. 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.
    8. Taslimi, Mohammad, 2003. "Optimal Earnings-Related Unemployment Benefits," Working Paper Series 2003:16, Uppsala University, Department of Economics.
    9. Henrekson, Magnus & Persson, Mats, 2001. "The Effects on Sick Leave of Changes in the Sickness Insurance System," Seminar Papers 697, Stockholm University, Institute for International Economic Studies.
    10. Alan B. Krueger & Bruce D. Meyer, 2002. "Labor Supply Effects of Social Insurance," NBER Working Papers 9014, National Bureau of Economic Research, Inc.
    11. 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.
    12. Edin, P.-A. & Fredriksson, P., 2000. "LINDA - Longitudinal INdividual DAta for Sweden," Papers 2000-19, Uppsala - Working Paper Series.
    13. 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.
    14. Stephen Nickell & D. Nicolitsas, 1994. "Wages," LSE Research Online Documents on Economics 51644, London School of Economics and Political Science, LSE Library.
    15. Kenneth Carling & Bertil Holmlund & Altin Vejsiu, 2000. "Do Benefit Cuts Boost Job Findings? Swedish Evidence From the 1990s," CESifo Working Paper Series 365, CESifo Group Munich.
    16. Janet Currie & Brigitte C. Madrian, 1998. "Health, Health Insurance and the Labor Market," JCPR Working Papers 27, Northwestern University/University of Chicago Joint Center for Poverty Research.
    17. 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.
    18. 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.
    19. Palme, Mårten & Svensson, Ingemar, 2002. "Pathways to Retirement and Retirement Incentives in Sweden," Arbetsrapport 2002:9, Institute for Futures Studies.
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