The Effects of Employers' Disability and Unemployment Insurance Costs on Benefit Inflows

Tomi Kyyrä and Juha Tuomala ()
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Juha Tuomala: VATT, Helsinki

No 15797, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In Finland, large firms are partially liable for the costs of disability and unemployment benefits paid to their former workers. To estimate the effects of such costs, we exploit a reform that extended this cost-sharing to cover a new group of blue-collar workers. We show that experience rating in disability insurance reduces inflows to sickness and disability benefits and increases participation in vocational rehabilitation programs, whereas employers' unemployment insurance costs reduce excess layoffs of older workers who are eligible for extended unemployment benefits until retirement age. We find no evidence of spillover effects: employers' costs in one benefit type do not affect inflows to other types of the benefits.

Keywords: experience rating; coinsurance; disability insurance; unemployment insurance (search for similar items in EconPapers)
JEL-codes: H32 J14 J26 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2022-12
New Economics Papers: this item is included in nep-eur, nep-lab and nep-pbe
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Published - published in: Labour Economics, 2023, 85, 102434

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Related works:
Journal Article: The effects of employers’ disability and unemployment insurance costs on benefit inflows (2023)
Working Paper: The Effects of Employers' Disability and Unemployment Insurance Costs on Benefit Inflows (2022)
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