On the Redistributive Effect of Upper Benefit Limits in Bismarckian Social Insurance

Andreas Bergh ()

Finnish Economic Papers, 2004, vol. 17, issue 2, pages 73-78

Abstract: This paper examines the redistributive effect of upper benefit limits (“ceilings”) in short term Bismarckian social insurance. Using data describing the Swedish sickness benefit we show that ceilings create a small redistribution at fairly high costs in terms of total utility and political sustainability. The simulation suggests that social insurance schemes with ceilings are politically more vulnerable to competition from private insurance markets than social insurance where the same amount of redistribution is produced by progressive taxes or higher universal benefits.

JEL-codes: H53 I38 (search for similar items in EconPapers)
Date: 2004
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Persistent link: http://EconPapers.repec.org/RePEc:fep:journl:v:17:y:2004:i:2:p:73-78

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