The effect of employer incentives in social insurance on individual wages

Johan Vikström ()

No 2009:13, Working Paper Series from IFAU - Institute for Evaluation of Labour Market and Education Policy

Abstract: Several studies have documented that employer incentives, in form of experience rating, co-insurance or deductibles, could decrease the social insurance usage. Such employer incentives may though have unintended side effects, as it gives employers incentives to transfer the costs to their workers, affecting individual wages and inducing cream skimming. Side effects which have been given limited attention. This paper aims to fill one part of this gap in the literature. The effect off employer incentives on individual wages is estimated using a reform in January 1992, which introduced an employer co-insurance system into the Swedish sickness absence insurance. The analysis based on a long population panel database, including survey information on hourly wages, gives no support of any important individual wage effects from the co-insurance reform. This is not a result of lack of variation in individual wage increases, nor is it a result of large standard errors.

Keywords: Wage; employer incentives; co-insurance; sickness absence; work absence; social insurance (search for similar items in EconPapers)
JEL-codes: C23 H55 I18 J39 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2009-06-04
New Economics Papers: this item is included in nep-ias and nep-lab
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