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Do interactions between unemployment insurance and sickness insurance affect transitions to employment?

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  • Hall, Caroline

    (IFAU - Institute for Labour Market Policy Evaluation)

Abstract

Previous research suggests that there are substantial interactions between the unemployment insurance (UI) and the sickness insurance (SI) in Sweden. Moral hazard arises in the interplay between these two social insurance systems, since by reporting sick an unemployed person can postpone the UI expiration date and sometimes also receive considerably higher benefits. This paper examines whether these interactions affect the transition rate from unemployment to employment. To study this question I utilize a reform which greatly reduced the incentives for unemployed persons to transfer to the SI. While there is evidence that this reform substantially lowered the incidence of sick reports among the unemployed, I find no evidence suggesting that the reduced sick report rate in turn affected the transition rate to employment

Suggested Citation

  • Hall, Caroline, 2008. "Do interactions between unemployment insurance and sickness insurance affect transitions to employment?," Working Paper Series 2008:18, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    • Handle: RePEc:hhs:ifauwp:2008_018
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    References listed on IDEAS

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    1. Carling, Kenneth & Holmlund, Bertil & Vejsiu, Altin, 2001. "Do Benefit Cuts Boost Job Finding? Swedish Evidence from the 1990s," Economic Journal, Royal Economic Society, vol. 111(474), pages 766-790, October.
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    Cited by:

    1. Márton Csilalg & Lili Márk, 2023. "The Incentive Effects of Sickness Benefit for the Unemployed – Analysis of a Reduction in Potential Benefit Duration," CERS-IE WORKING PAPERS 2317, Institute of Economics, Centre for Economic and Regional Studies.
    2. Omar Aziz & Nick Carroll & John Creedy, 2015. "An analysis of benefit flows in New Zealand using a social accounting framework," New Zealand Economic Papers, Taylor & Francis Journals, vol. 49(1), pages 1-21, April.
    3. Ivana Koštuříková, 2018. "Vliv změn v systému nemocenského pojištění na zaměstnanost v moravských krajích České republiky," Working Papers 0054, Silesian University, School of Business Administration.
    4. Stephen Whelan, 2010. "The Interaction between Income Support Programs," LABOUR, CEIS, vol. 24(4), pages 407-440, December.
    5. Omar Aziz & Nick Carroll & John Creedy, 2015. "An analysis of benefit flows in New Zealand using a social accounting framework," New Zealand Economic Papers, Taylor & Francis Journals, vol. 49(1), pages 1-21, April.

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    More about this item

    Keywords

    Unemployment insurance; sickness insurance; unemployment duration; health; duration analysis;
    All these keywords.

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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