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

Caroline Hall

No 2008:18, Working Paper Series from IFAU - Institute for Evaluation of Labour Market and Education Policy

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

Keywords: Unemployment insurance; sickness insurance; unemployment duration; health; duration analysis (search for similar items in EconPapers)
JEL-codes: C41 H55 I18 J64 J65 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2008-09-03
New Economics Papers: this item is included in nep-hea, nep-ias and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Do Interactions between Unemployment Insurance and Sickness Insurance Affect Transitions to Employment? (2011)
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