Moving between Welfare Payments. The Case of Sickness Insurance for the Unemployed
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Number in series: 4
This study describes the probability of transition from unemployment with unemployment insurance (UI) to sickness with sickness insurance (SI), using a grouped proportional hazard duration model and 9 years of monthly panel data. The combination of duration-limited UI and the fact that SI rights do not depend on remaining UI, creates an incentive to apply for SI, which is strongest immediately before UI expires. Estimation shows that the sickness hazard increases by around 50% when UI is about to end. Data on the sickness spells reveal that those who were given SI shortly before UI expired, are more likely to fully exploit the maximum of 12 months SI.
C41; J64; J65; I18
Unemployment insurance, sickness insurance, unemployment duration
Project:Oppdragsgiver: Norges forskningsråd
Frisch prosjekt: 1151 - Mobilizing labour force participation