nep-ias New Economics Papers
on Insurance Economics
Issue of 2012‒06‒13
three papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Business Management

  1. WP 13 Flexicurity, wage dynamics and inequality over the life-cycle By Paul Bingley; Lorenzo Cappellari; Niels Westergård-Nielsen
  2. Should sickness insurance and health care be administrated by the same jurisdiction? An empirical analysis By Johansson, Per; Nilsson, Martin

  1. By: Paul Bingley; Lorenzo Cappellari; Niels Westergård-Nielsen
    Abstract: We investigate the relationship between life-cycle wages and flexicurity in Denmark. We separate permanent from transitory wages and characterise flexicurity using membership of unemployment insurance funds. We find that flexicurity is associated with lower wage growth heterogeneity over the life-cycle and greater wage instability, changing the nature of wage inequality from permanent to transitory. While we are in general unable to formally test for moral hazard against adverse selection into unemployment insurance membership, robustness checks suggest that moral hazard is the relevant interpretation.
    Keywords: Unemployment insurance, wage dynamics, wage inequality, wage instability.
    JEL: J31 J65
    Date: 2012–03
  2. By: Johansson, Per (IFAU - Institute for Evaluation of Labour Market and Education Policy); Nilsson, Martin (IFAU - Institute for Evaluation of Labour Market and Education Policy)
    Abstract: Sweden has obligatory sickness and disability insurance which is both financed (from payroll taxes) and administered by the government. In order to receive sickness benefits, insured individuals must have certificates issued by a medical doctor. Since health care is administered at the county level, this means that monitoring is, to some extent, decentralized at a lower jurisdictional level than the funding and governance of the insurance. This paper studies one consequence of such decentralization: the effect on individual sickness absence when such certificates are not approved by the Sickness Insurance Agency (SIA)and are instead re-remitted to the doctor for completion and, potential, reapproval by the SIA. We find that this re-remission increases the length of sickness absence spells by an average of 30 percent. A suggestive test of the reason for the observed effect indicates that it is due to a decrease in health caused by increased stress related to the uncertainty about entitlement and future sickness benefits. Given that added resources improve the quality of the patients’ medical certificates, directed intergovernmental grants from the state to the counties would be cost saving.
    Keywords: Monitoring; moral hazard; public social insurance; cost-benefit; intergovernmental grants
    JEL: H51 H55 J22
    Date: 2012–02–07
  3. By: Bratberg, Espen (University of Bergen,); Monstad, Karin (HEB-Uni Rokkansenteret)
    Abstract: Sickness absence has risen over the past years in Norway. One explanation put forward is that a tougher labor market represents a health hazard, while a competing hypothesis predicts that loss of job security works as a disciplinary device. In this analysis we aim to trace a causal impact of organizational turmoil or job insecurity on sickness absence, applying a difference-in-difference approach. Utilizing a negative financial shock that hit specific employers and workplaces, we find that sickness absence decreased considerably in the following year. The decrease is substantially larger among male than among female employees, and stronger for days of sickness absence than for its incidence. <p> Acknowledgements: The paper has benefited from comments at the 2011 Norwegian Social Insurance Research Meeting in Lillehammer and the 2012 HEB/HERO workshop in Geilo. We are also grateful for information from Ingvar Linde, Jan G. Myrvang, and chief executives of the eight municipalities impacted by the financial shock. Remaining errors are the authors’ sole responsibility. Financial support from the Norwegian Research Council (Grant 187912) is gratefully acknowledged.
    Keywords: Worker absenteeism; sickness absence; organizational schange; job security; difference-in-differences
    JEL: H53 I18 J22 J28 J45
    Date: 2012–04–30

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