Redistributive effects of the Swedish social insurance system

J Khan, Ulf Gerdtham, B Jansson

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)

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.
Original languageEnglish
Pages (from-to)273-278
JournalEuropean Journal of Public Health
Volume12
Issue number4
DOIs
Publication statusPublished - 2002

Subject classification (UKÄ)

  • Public Health, Global Health, Social Medicine and Epidemiology

Keywords

  • social
  • payment principle
  • income inequality
  • income redistribution
  • social insurance
  • cost of illness

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