Working Paper Series
IFAU - Institute for Evaluation of Labour Market and Education Policy
Harmonizing unemployment and sickness insurance: Why (not)?
Abstract: The paper discusses harmonization of unemployment
insurance (UI) and sickness insurance (SI). The focus is on the difference
between the benefit ceilings in the two insurance systems that has been
shown to affect the behavior among unemployed SI recipients. The four
conclusions are: (i) It is difficult to argue that the design with
different benefit ceilings of UI and SI would be optimal. (ii) During the
study period 1998–2001, unemployed were overrepresented among SI
recipients. (iii) Some of the overrepresentation is due to the different
benefit ceilings. Thus, harmonization of the systems is motivated; (iv) In
a complex system as the Swedish social insurance system, reducing moral
hazard in one group probably also implies various indirect effects. When
designing a reform, all insurances should be considered simultaneously.
Keywords: Government policies; moral hazard; sickness insurance; unemployment insurance; (follow links to similar papers)
JEL-Codes: H51; H55; I18; J65; (follow links to similar papers)
40 pages, June 3, 2004
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- This paper is published as:
Larsson, Laura, (2004), 'Harmonizing unemployment and sickness insurance: Why (not)?', Swedish Economic Policy Review, Vol. 11, No. 1, pages 151-188
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