IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp6446.html
   My bibliography  Save this paper

Social Insurance Networks

Author

Listed:
  • Markussen, Simen

    (Ragnar Frisch Centre for Economic Research)

  • Røed, Knut

    (Ragnar Frisch Centre for Economic Research)

Abstract

Based on administrative panel data from Norway, we examine how social insurance dependency spreads within neighborhoods, families, ethnic minorities, and among former schoolmates. We use a fixed effects methodology that accounts for endogenous group formation, contextual interactions, and time-constant as well as time-varying confounders. We report evidence that social insurance dependency is contagious. The estimated network effects are both quantitatively and statistically significant, and they rise rapidly with "relational closeness" in a way that establishes endogenous social interaction as a central causal mechanism. Social interactions do not cross ethnic borders.

Suggested Citation

  • Markussen, Simen & Røed, Knut, 2012. "Social Insurance Networks," IZA Discussion Papers 6446, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp6446
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp6446.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Assar Lindbeck & Sten Nyberg & Jörgen W. Weibull, 1999. "Social Norms and Economic Incentives in the Welfare State," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 1-35.
    2. Assar Lindbeck & Sten Nyberg & Jörgen W. Weibull, 2003. "Social Norms and Welfare State Dynamics," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 533-542, 04/05.
    3. Alois Stutzer & Rafael Lalive, 2004. "The Role of Social Work Norms in Job Searching and Subjective Well-Being," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 696-719, June.
    4. Mari Rege & Kjetil Telle & Mark Votruba, 2012. "Social Interaction Effects in Disability Pension Participation: Evidence from Plant Downsizing," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(4), pages 1208-1239, December.
    5. Edward L. Glaeser & Bruce I. Sacerdote & Jose A. Scheinkman, 2003. "The Social Multiplier," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 345-353, 04/05.
    6. Olof Åslund & Per-Anders Edin & Peter Fredriksson & Hans Grönqvist, 2011. "Peers, Neighborhoods, and Immigrant Student Achievement: Evidence from a Placement Policy," American Economic Journal: Applied Economics, American Economic Association, vol. 3(2), pages 67-95, April.
    7. Lindbeck, Assar, 1995. "Hazardous Welfare-State Dynamics," American Economic Review, American Economic Association, vol. 85(2), pages 9-15, May.
    8. Rafael Lalive & M. Alejandra Cattaneo, 2009. "Social Interactions and Schooling Decisions," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 457-477, August.
    9. Erik Biørn & Simen Gaure & Simen Markussen & Knut Røed, 2013. "The rise in absenteeism: disentangling the impacts of cohort, age and time," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(4), pages 1585-1608, October.
    10. Yannis M. Ioannides & Linda Datcher Loury, 2004. "Job Information Networks, Neighborhood Effects, and Inequality," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1056-1093, December.
    11. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-1035, December.
    12. Andrea Ichino & Giovanni Maggi, 2000. "Work Environment and Individual Background: Explaining Regional Shirking Differentials in a Large Italian Firm," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 1057-1090.
    13. Marianne Bertrand & Erzo F. P. Luttmer & Sendhil Mullainathan, 2000. "Network Effects and Welfare Cultures," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 1019-1055.
    14. Mari Rege & Kjetil Telle & Mark Votruba, 2009. "The Effect of Plant Downsizing on Disability Pension Utilization," Journal of the European Economic Association, MIT Press, vol. 7(4), pages 754-785, June.
    15. Bernt Bratsberg & Oddbjørn Raaum & Knut Røed, 2010. "When Minority Labor Migrants Meet the Welfare State," Journal of Labor Economics, University of Chicago Press, vol. 28(3), pages 633-676, July.
    16. repec:aei:rpbook:24945 is not listed on IDEAS
    17. Steven N. Durlauf & Yannis M. Ioannides, 2010. "Social Interactions," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 451-478, September.
    18. Hesselius, Patrik & Johansson, Per & Nilsson, Peter, 2009. "Sick of your colleagues' absence?," Working Paper Series 2009:2, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    19. Lawrence E. Blume & William A. Brock & Steven N. Durlauf & Yannis M. Ioannides, 2010. "Identification of Social Interactions," Discussion Papers Series, Department of Economics, Tufts University 0754, Department of Economics, Tufts University.
    20. Beatrix Eugster & Rafael Lalive & Andreas Steinhauer & Josef Zweimüller, 2011. "The Demand for Social Insurance: Does Culture Matter?," Economic Journal, Royal Economic Society, vol. 121(556), pages 413-448, November.
    21. Bradley, Steve & Green, Colin & Leeves, Gareth, 2007. "Worker absence and shirking: Evidence from matched teacher-school data," Labour Economics, Elsevier, vol. 14(3), pages 319-334, June.
    22. Charles F. Manski, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(3), pages 531-542.
    23. Rama Cont & Matthias Loewe, 2010. "Social distance, heterogeneity and social interactions," Post-Print hal-00545746, HAL.
    24. Dan Black & Kermit Daniel & Seth Sanders, 2002. "The Impact of Economic Conditions on Participation in Disability Programs: Evidence from the Coal Boom and Bust," American Economic Review, American Economic Association, vol. 92(1), pages 27-50, March.
    25. Markussen, Simen, 2009. "Closing the Gates? Evidence from a Natural Experiment on Physicians' Sickness Certification," Memorandum 19/2009, Oslo University, Department of Economics.
    26. Aizer, Anna & Currie, Janet, 2004. "Networks or neighborhoods? Correlations in the use of publicly-funded maternity care in California," Journal of Public Economics, Elsevier, vol. 88(12), pages 2573-2585, December.
    27. Olof Åslund & Peter Fredriksson, 2009. "Peer Effects in Welfare Dependence: Quasi-Experimental Evidence," Journal of Human Resources, University of Wisconsin Press, vol. 44(3).
    28. Cont, Rama & Löwe, Matthias, 2010. "Social distance, heterogeneity and social interactions," Journal of Mathematical Economics, Elsevier, vol. 46(4), pages 572-590, July.
    29. Bratsberg, Bernt & Fevang, Elisabeth & Røed, Knut, 2010. "Disability in the Welfare State: An Unemployment Problem in Disguise?," IZA Discussion Papers 4897, Institute of Labor Economics (IZA).
    30. Bratsberg, Bernt & Fevang, Elisabeth & Røed, Knut, 2013. "Job loss and disability insurance," Labour Economics, Elsevier, vol. 24(C), pages 137-150.
    31. Richard Burkhauser & Mary C. Daly, 2011. "The Declining Work and Welfare of People with Disabilities," Books, American Enterprise Institute, number 7631, September.
    32. Gaure, Simen, 2013. "OLS with multiple high dimensional category variables," Computational Statistics & Data Analysis, Elsevier, vol. 66(C), pages 8-18.
    33. J. V. Henderson & J. F. Thisse (ed.), 2004. "Handbook of Regional and Urban Economics," Handbook of Regional and Urban Economics, Elsevier, edition 1, volume 4, number 4.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rieck, Karsten Marshall Elseth & Vaage, Kjell, 2012. "Social Interactions At The Workplace: Exploring Sickness Absence Behavior," Working Papers in Economics 11/12, University of Bergen, Department of Economics.
    2. Mittag, Nikolas, 2016. "A Simple Method to Estimate Large Fixed Effects Models Applied to Wage Determinants and Matching," IZA Discussion Papers 10447, Institute of Labor Economics (IZA).
    3. Gerald J. Pruckner & Thomas Schober & Katrin Zocher, 2020. "The company you keep: health behavior among work peers," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(2), pages 251-259, March.
    4. Janna Bergsvik, 2019. "Linking neighbors’ fertility. Third births in Norwegian neighborhoods," Discussion Papers 898, Statistics Norway, Research Department.
    5. Schreiner, Ragnhild C., 2019. "Unemployed or Disabled? Disability Screening and Labor Market Outcomes of Youths," Memorandum 5/2019, Oslo University, Department of Economics.
    6. Alpino, Matteo & Hauge, Karen Evelyn & Kotsadam, Andreas & Markussen, Simen, 2022. "Effects of dialogue meetings on sickness absence—Evidence from a large field experiment," Journal of Health Economics, Elsevier, vol. 83(C).
    7. Markussen, Simen & Røed, Knut, 2017. "Egalitarianism under Pressure: Toward Lower Economic Mobility in the Knowledge Economy?," IZA Discussion Papers 10664, Institute of Labor Economics (IZA).
    8. Grossman, Daniel & Khalil, Umair, 2020. "Neighborhood networks and program participation," Journal of Health Economics, Elsevier, vol. 70(C).
    9. Godøy, Anna & Dale-Olsen, Harald, 2018. "Spillovers from gatekeeping – Peer effects in absenteeism," Journal of Public Economics, Elsevier, vol. 167(C), pages 190-204.
    10. Gary W. Cox & Jon H. Fiva & Max-Emil M. King, 2023. "Bound by Borders: Voter Mobilization through Social Networks," CESifo Working Paper Series 10718, CESifo.
    11. De Brouwer, Octave & Tojerow, Ilan, 2023. "The Growth of Disability Insurance in Belgium: Determinants and Policy Implications," IZA Discussion Papers 16376, Institute of Labor Economics (IZA).
    12. Gaure, Simen, 2013. "OLS with multiple high dimensional category variables," Computational Statistics & Data Analysis, Elsevier, vol. 66(C), pages 8-18.
    13. Knut Røed, 2012. "Active social insurance," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-22, December.
    14. Markussen, Simen & Røed, Knut, 2017. "The gender gap in entrepreneurship – The role of peer effects," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 356-373.
    15. Markussen, Simen & Røed, Knut, 2016. "Gendered Entrepreneurship Networks," IZA Discussion Papers 9984, Institute of Labor Economics (IZA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Assar Lindbeck & Mårten Palme & Mats Persson, 2016. "Sickness Absence and Local Benefit Cultures," Scandinavian Journal of Economics, Wiley Blackwell, vol. 118(1), pages 49-78, January.
    2. Mari Rege & Kjetil Telle & Mark Votruba, 2012. "Social Interaction Effects in Disability Pension Participation: Evidence from Plant Downsizing," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(4), pages 1208-1239, December.
    3. Rieck, Karsten Marshall Elseth & Vaage, Kjell, 2012. "Social Interactions At The Workplace: Exploring Sickness Absence Behavior," Working Papers in Economics 11/12, University of Bergen, Department of Economics.
    4. Lindbeck, Assar & Palme, Mårten & Persson, Mats, 2007. "Social Interaction and Sickness Absence," Working Paper Series 725, Research Institute of Industrial Economics.
    5. Carlsen, Benedicte, 2012. "From absence to absenteeism? A qualitative cross case study of teachers’ views on sickness absence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(2), pages 129-136.
    6. Martin Ljunge, 2012. "The Spirit of the Welfare State? Adaptation in the Demand for Social Insurance," Journal of Human Capital, University of Chicago Press, vol. 6(3), pages 187-223.
    7. Bratberg, Espen & Monstad, Karin, 2015. "Worried sick? Worker responses to a financial shock," Labour Economics, Elsevier, vol. 33(C), pages 111-120.
    8. Qingyan Shang, 2014. "Endogenous neighborhood effects on welfare participation," Empirical Economics, Springer, vol. 47(2), pages 639-667, September.
    9. Giulio Zanella, 2004. "Social Interactions and Economic Behavior," Department of Economics University of Siena 441, Department of Economics, University of Siena.
    10. Stephen L. Ross, 2009. "Social Interactions within Cities: Neighborhood Environments and Peer Relationships," Working papers 2009-31, University of Connecticut, Department of Economics.
    11. Knut Røed, 2012. "Active social insurance," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-22, December.
    12. Sergi Jiménez-Martín & Arnau Juanmarti Mestres & Judit Vall Castelló, 2019. "Great Recession and disability insurance in Spain," Empirical Economics, Springer, vol. 56(5), pages 1623-1645, May.
    13. Sylvain Chareyron & Patrick Domingues & Lucie Fotsa Lieno-Gaillardon, 2021. "Does Social Interaction Matter for Welfare Participation?," Annals of Economics and Statistics, GENES, issue 141, pages 49-70.
    14. Andreia Tolciu, 2010. "The Economics of Social Interactions: An Interdisciplinary Ground for Social Scientists?," Forum for Social Economics, Taylor & Francis Journals, vol. 39(3), pages 223-242, January.
    15. Manuela Angelucci & Silvia Prina & Heather Royer & Anya Samek, 2015. "When Incentives Backfire: Spillover Effects in Food Choice," NBER Working Papers 21481, National Bureau of Economic Research, Inc.
    16. Yannis M. Ioannides & Giorgio Topa, 2010. "Neighborhood Effects: Accomplishments And Looking Beyond Them," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 343-362, February.
    17. Lorenzo Cappellari & Konstantinos Tatsiramos, 2010. "Friends’ Networks and Job Finding Rates," DISCE - Quaderni dell'Istituto di Economia dell'Impresa e del Lavoro ieil0059, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    18. Gordon B. Dahl & Katrine V. L?ken & Magne Mogstad, 2014. "Peer Effects in Program Participation," American Economic Review, American Economic Association, vol. 104(7), pages 2049-2074, July.
    19. Gerald J. Pruckner & Thomas Schober & Katrin Zocher, 2020. "The company you keep: health behavior among work peers," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(2), pages 251-259, March.
    20. Kroft, Kory, 2008. "Takeup, social multipliers and optimal social insurance," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 722-737, April.

    More about this item

    Keywords

    peer effects; social interaction; social multiplier; work norms;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:iza:izadps:dp6446. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.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.