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Do Interactions between Unemployment Insurance and Sickness Insurance Affect Transitions to Employment?
Author(s) -
Hall Caroline
Publication year - 2011
Publication title -
labour
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.403
H-Index - 34
eISSN - 1467-9914
pISSN - 1121-7081
DOI - 10.1111/j.1467-9914.2011.00532.x
Subject(s) - unemployment , affect (linguistics) , incentive , sick leave , income protection insurance , labour economics , economics , demographic economics , moral hazard , self insurance , health insurance , actuarial science , insurance policy , general insurance , health care , economic growth , psychology , communication , microeconomics
Previous research suggests that there are substantial interactions between the unemployment and sickness insurance in Sweden. Moral hazard arises in the interplay between these insurance systems, as by reporting sick an unemployed person can postpone unemployment insurance expiration and sometimes receive considerably higher benefits. I examine whether these interactions affect the transition rate to employment. To do this I use a reform that greatly reduced the incentives to transfer to sickness benefits. Although there is evidence that this reform effectively lowered the incidence of sick reports among the unemployed, I do not find that the reduced sick report rate in turn affected the transition rate to employment.