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Voluntary or compulsory? Exploring dynamics of mutual cooperative formation in Swedish health insurance at the turn of the twentieth century

Author

Listed:
  • Lars Fredrik Andersson

    (Umeå University)

  • Liselotte Eriksson

    (Umeå University)

Abstract

"In this paper we explore the dynamics of mutual cooperative formation in Swedish health insurance during the period 1901 to 1910 ‐ a period where health insurance was in the making and organized along voluntary, ‘fraternal’ principles and compulsory, ‘factory scheme’ principles. Most previous studies on health insurance have addressed information asymmetry issues on either voluntary fraternal based societies or compulsory factory based societies, while few studies has compared the two forms of health insurance and their implications. By comparing the outcome in terms of sickness for the two forms of organization, this paper traces the efficiency in controlling for moral hazard and adverse selection across a large panel of voluntary and compulsory health insurance societies. We find that voluntary societies were equal to, or even more efficient, than compulsory societies suggesting that voluntary principles help mitigate moral hazard and select risk."

Suggested Citation

  • Lars Fredrik Andersson & Liselotte Eriksson, 2016. "Voluntary or compulsory? Exploring dynamics of mutual cooperative formation in Swedish health insurance at the turn of the twentieth century," Working Papers 16007, Economic History Society.
    • Handle: RePEc:ehs:wpaper:16007
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    References listed on IDEAS

    as
    1. Jopp, Tobias Alexander, 2012. "Insurance, size and exposure to actuarial risk: empirical evidence from nineteenth- and early twentieth-century German Knappschaften1," Financial History Review, Cambridge University Press, vol. 19(1), pages 75-116, April.
    2. Guinnane, Timothy W. & Streb, Jochen, 2011. "Moral Hazard in a Mutual Health Insurance System: German Knappschaften, 1867–1914," The Journal of Economic History, Cambridge University Press, vol. 71(1), pages 70-104, March.
    3. Horrell, Sara & Oxley, Deborah, 2000. "Work and prudence: Household responses to income variation in nineteenth-century Britain," European Review of Economic History, Cambridge University Press, vol. 4(1), pages 27-57, April.
    4. Smith, Bruce D & Stutzer, Michael, 1995. "A Theory of Mutual Formation and Moral Hazard with Evidence from the History of the Insurance Industry," The Review of Financial Studies, Society for Financial Studies, vol. 8(2), pages 545-577.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Mutual; Cooperative networks; Fraternalism; Heath Insurance; Sickness insurance;
    All these keywords.

    JEL classification:

    • N00 - Economic History - - General - - - General

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