Moral Hazard in a Mutual Health Insurance System: German Knappschaften, 1867–1914

Timothy Guinnane and Jochen Streb

The Journal of Economic History, 2011, vol. 71, issue 1, 70-104

Abstract: The Knappschaft was a mutual association through which German miners insured themselves against accident, illness, and old age. The Knappschaft underlies Bismarck's sickness and accident insurance legislation, and thus Germany's system today. This article focuses on moral hazard, which plagued the Knappschaften in the later nineteenth century. Sick pay made it attractive for miners to feign illness that made them unable to work. We outline the moral hazard problem the Knappschaften faced as well as the mechanisms they devised to control it, and then use econometric models to demonstrate that those mechanisms were at best imperfect.

Date: 2011
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Related works:
Working Paper: Moral Hazard in a Mutual Health-Insurance System: German Knappschaften, 1867–1914 (2010)
Working Paper: Moral Hazard in a Mutual Health-Insurance System: German Knappschaften, 1867-1914 (2009)
Working Paper: Moral Hazard in a Mutual Health-Insurance System: German Knappschaften, 1867-1914 (2009)
Working Paper: Moral hazard in a mutual health-insurance system: German Knappschaften, 1867-1914 (2009)
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