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Incentive and spill-over effects of supplementary sickness compensation

Author

Listed:
  • Hesselius, Patrik

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

  • Persson, Malin

    () (Department of Economics, Uppsala University)

Abstract

In 1998 the Swedish national sickness insurance policy changed to allow additional compensation from e.g. collective agreements after the 90th day of absence without a reduction of the public sickness benefit. We estimate the effects of this policy change on the duration of sickness absence for employees in the municipal sector. After the change in policy, this group received 10 percentage points additional compensation during day 91 to 360 in a sick leave. The results indicate that durations of at least 91 days increased by 4.7 days on average. As a consequence, the cost for the national sickness insurance increased by 3.0 percent. For the supplementary insurance to cover its total cost, insurance premiums should be increased by 22 percent.

Suggested Citation

  • Hesselius, Patrik & Persson, Malin, 2007. "Incentive and spill-over effects of supplementary sickness compensation," Working Paper Series 2007:16, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  • Handle: RePEc:hhs:ifauwp:2007_016
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    File URL: http://www.ifau.se/upload/pdf/se/2007/wp07-16.pdf
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    References listed on IDEAS

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    1. Johansson, Per & Palme, Marten, 1996. "Do economic incentives affect work absence? Empirical evidence using Swedish micro data," Journal of Public Economics, Elsevier, pages 195-218.
    2. Holmlund & B., 1991. "Absenteeism , Worker Compensation, and the Financing of Health Insurance," Papers 1991s, Uppsala - Working Paper Series.
    3. Johansson, Per & Palme, Marten, 2005. "Moral hazard and sickness insurance," Journal of Public Economics, Elsevier, pages 1879-1890.
    4. 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.
    5. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 249-275.
    6. 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.
    7. Arellano, M, 1987. "Computing Robust Standard Errors for Within-Groups Estimators," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 49(4), pages 431-434, November.
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    Cited by:

    1. Lindgren, Karl-Oskar, 2012. "Workplace size and sickness absence transitions," Working Paper Series 2012:26, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    2. Nilsson, Martin, 2015. "Economic incentives and long-term sickness absence: the indirect effect of replacement rates on absence behavior," Working Paper Series 2015:17, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    3. Persson, Malin, 2011. "Substitution between temporary parental leave and sickness absence," Working Paper Series 2011:19, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    4. Pathric Hägglund, 2013. "Do time limits in the sickness insurance system increase return to work?," Empirical Economics, Springer, pages 567-582.
    5. Ziebarth, Nicolas R., 2013. "Long-term absenteeism and moral hazard—Evidence from a natural experiment," Labour Economics, Elsevier, vol. 24(C), pages 277-292.

    More about this item

    Keywords

    Social insurance; sickness absence; collective agreements;

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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