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Redistributive effects of the Swedish social insurance system

Khan, J; Gerdtham, Ulf LU and Jansson, B (2002) In European Journal of Public Health 12(4). p.273-278
Abstract
Background: Four principles are used to distribute payments via the Swedish social-insurance system in cases of temporary or permanent illness and death. This paper studies the redistributive effects on income of these four principles. Methods: The analysis is based on aggregate social-insurance data from the 25 municipalities that comprise Stockholm County in Sweden. For nine different types of social-insurance payments based on the four principles, the degree of income redistribution is measured according to concentration indexes and differences between Gini coefficients with social-insurance payments excluded and included. Results: The concentration indexes for payments from the nine social-insurance schemes in total is -0.0469. The... (More)
Background: Four principles are used to distribute payments via the Swedish social-insurance system in cases of temporary or permanent illness and death. This paper studies the redistributive effects on income of these four principles. Methods: The analysis is based on aggregate social-insurance data from the 25 municipalities that comprise Stockholm County in Sweden. For nine different types of social-insurance payments based on the four principles, the degree of income redistribution is measured according to concentration indexes and differences between Gini coefficients with social-insurance payments excluded and included. Results: The concentration indexes for payments from the nine social-insurance schemes in total is -0.0469. The Gini coefficient falls from 0.0437 excluding insurance payments (i.e. for income only from gainful work, IGW) to 0.0379 when including insurance payments with income from gainful work (IGW+TP). That is, the Gini coefficient is 15% lower when insurance payments are included. Decomposition by payment shows that the largest redistribution effect on income inequality is made by disability pension. Conclusion: Municipalities with low average income are favoured by the Swedish social-insurance system. Payment principles can be ranked according to their redistributive capacity: mix of compensating-lost-income and flat-rate, compensating-lost- income, means-testing, flat-rate, and need-based respectively. The nine social-insurance schemes contribute very differently to income redistribution. Disability pension and sickness allowance contribute most to income redistribution and reducing income inequality. (Less)
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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
social, payment principle, income inequality, income redistribution, social insurance, cost of illness
in
European Journal of Public Health
volume
12
issue
4
pages
273 - 278
publisher
Oxford University Press
external identifiers
  • pmid:12506502
  • wos:000179952100007
  • scopus:0036913315
ISSN
1101-1262
DOI
10.1093/eurpub/12.4.273
language
English
LU publication?
yes
id
d917a9d0-0eb0-4859-a248-acddd452b2ff (old id 892171)
date added to LUP
2008-01-23 17:07:39
date last changed
2017-06-11 03:31:36
@article{d917a9d0-0eb0-4859-a248-acddd452b2ff,
  abstract     = {Background: Four principles are used to distribute payments via the Swedish social-insurance system in cases of temporary or permanent illness and death. This paper studies the redistributive effects on income of these four principles. Methods: The analysis is based on aggregate social-insurance data from the 25 municipalities that comprise Stockholm County in Sweden. For nine different types of social-insurance payments based on the four principles, the degree of income redistribution is measured according to concentration indexes and differences between Gini coefficients with social-insurance payments excluded and included. Results: The concentration indexes for payments from the nine social-insurance schemes in total is -0.0469. The Gini coefficient falls from 0.0437 excluding insurance payments (i.e. for income only from gainful work, IGW) to 0.0379 when including insurance payments with income from gainful work (IGW+TP). That is, the Gini coefficient is 15% lower when insurance payments are included. Decomposition by payment shows that the largest redistribution effect on income inequality is made by disability pension. Conclusion: Municipalities with low average income are favoured by the Swedish social-insurance system. Payment principles can be ranked according to their redistributive capacity: mix of compensating-lost-income and flat-rate, compensating-lost- income, means-testing, flat-rate, and need-based respectively. The nine social-insurance schemes contribute very differently to income redistribution. Disability pension and sickness allowance contribute most to income redistribution and reducing income inequality.},
  author       = {Khan, J and Gerdtham, Ulf and Jansson, B},
  issn         = {1101-1262},
  keyword      = {social,payment principle,income inequality,income redistribution,social insurance,cost of illness},
  language     = {eng},
  number       = {4},
  pages        = {273--278},
  publisher    = {Oxford University Press},
  series       = {European Journal of Public Health},
  title        = {Redistributive effects of the Swedish social insurance system},
  url          = {http://dx.doi.org/10.1093/eurpub/12.4.273},
  volume       = {12},
  year         = {2002},
}