Redistributive effects of the Swedish social insurance system
Author
Summary, in English
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.
Department/s
Publishing year
2002
Language
English
Pages
273-278
Publication/Series
European Journal of Public Health
Volume
12
Issue
4
Document type
Journal article
Publisher
Oxford University Press
Topic
- Public Health, Global Health, Social Medicine and Epidemiology
Keywords
- social
- payment principle
- income inequality
- income redistribution
- social insurance
- cost of illness
Status
Published
Research group
- Social Epidemiology
ISBN/ISSN/Other
- ISSN: 1101-1262