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A sick insurance system? - The effects of sick leave on the financial stability of the Swedish Pension System

Lundgren, Rebecka and Lundgren, Carl (2006)
Department of Economics
Abstract
After the reform in the 1990’s, the Swedish pension system is one of the most financially
stable in Europe, but the high level of sick leave is a problem left to solve. The purpose of this
thesis is to examine the effect of sick leave on the financial stability of the Swedish pension
system, today and in the future. We aim to enlighten the link between the sickness insurance
and the pension system and show that these two are communicating vessels, why the number
of people on sick leave has an impact on the governmental expenditure on pensions. This is
done in a three-piece analysis including a numerical model, concluding that the high level of
sick leave is a risk factor, especially since the margins in the pension system currently are... (More)
After the reform in the 1990’s, the Swedish pension system is one of the most financially
stable in Europe, but the high level of sick leave is a problem left to solve. The purpose of this
thesis is to examine the effect of sick leave on the financial stability of the Swedish pension
system, today and in the future. We aim to enlighten the link between the sickness insurance
and the pension system and show that these two are communicating vessels, why the number
of people on sick leave has an impact on the governmental expenditure on pensions. This is
done in a three-piece analysis including a numerical model, concluding that the high level of
sick leave is a risk factor, especially since the margins in the pension system currently are
small. The analysis also enlightens the state’s pension entitlements for recipients of sickness
and activity compensation, and how these entitlements stretches far into the future. There is a
need to get more people receiving sickness and activity compensation back to the labour
market to lower the costs of pensions, not least the increasing number of young recipients. (Less)
Please use this url to cite or link to this publication:
@misc{1334438,
  abstract     = {After the reform in the 1990’s, the Swedish pension system is one of the most financially
stable in Europe, but the high level of sick leave is a problem left to solve. The purpose of this
thesis is to examine the effect of sick leave on the financial stability of the Swedish pension
system, today and in the future. We aim to enlighten the link between the sickness insurance
and the pension system and show that these two are communicating vessels, why the number
of people on sick leave has an impact on the governmental expenditure on pensions. This is
done in a three-piece analysis including a numerical model, concluding that the high level of
sick leave is a risk factor, especially since the margins in the pension system currently are
small. The analysis also enlightens the state’s pension entitlements for recipients of sickness
and activity compensation, and how these entitlements stretches far into the future. There is a
need to get more people receiving sickness and activity compensation back to the labour
market to lower the costs of pensions, not least the increasing number of young recipients.},
  author       = {Lundgren, Rebecka and Lundgren, Carl},
  keyword      = {sickness insurance,Swedish pension system,sickness and activity compensation,pension costs,welfare state,Economics, econometrics, economic theory, economic systems, economic policy,Nationalekonomi, ekonometri, ekonomisk teori, ekonomiska system, ekonomisk politik},
  language     = {eng},
  note         = {Student Paper},
  title        = {A sick insurance system? - The effects of sick leave on the financial stability of the Swedish Pension System},
  year         = {2006},
}