Article thumbnail

Voluntary Public Unemployment Insurance

By Donald O. Parsons, Torben Tranæs and Helene Bie Lilleør

Abstract

Voluntary public unemployment systems are limited to a handful of countries, including Finland, Sweden, and, more substantially, Denmark. A voluntary system has the positive feature of other user-cost schemes, potentially efficient targeting of services. This presumes rational behavior as well as reasonable risk rating of premiums and the absence of worker access to alternative social programs. Using a 10% sample of the Danish population drawn from administrative data, we exploit the voluntary Danish system to explore the structure of unemployment insurance demand. The insurance take-up rate is surprisingly high, 80 percent in 1995, but varies systematically with economic incentives in a way that raises doubts about the targeting value of the current system. Political support for the Danish system may derive instead from the fact that a universal, compulsory system would generate rather modest additional net funds and with a twist--additional revenue would come disproportionately from low-wage workers.

OAI identifier:

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.

Suggested articles

Citations

  1. (1998). A Distinctive System: Origins and Impact of U.S. Unemployment Compensation,”
  2. (1956). American Insurance Association, Studies of Floods and Flood Damage 1952-1955,
  3. (1988). An Examination of Declining UI Claims during the 1980’s,” Unemployment Insurance Occasional Paper 88-3,
  4. (1980). Analysis of Covariance with Qualitative Data,”
  5. (1998). Arbejdsløshedsforsikring, “Bekendtgørelse om optagelse I en statsanerkendt arbejdsløshedskasse for lønmodtarere,” of
  6. (1997). Between Class and Market: Postwar Unionization in the Capitalist Democracies,
  7. (1985). Estimation and Inference in Two-Step Econometric Models"
  8. (1998). From Public to Private: The Case of Mortgage Payment Insurance
  9. (1990). Government Accounting Office, “Flood Insurance: Information on the Mandatory Purchasing Requirement,”
  10. (1994). Handelshøjskolens Forlag (in Danish),
  11. (1986). Insurance for Unemployment,
  12. (1955). Insurance Schemes, Studies and Reports, New Series,
  13. (1984). Panel Data,”
  14. (1991). Recent Trends in Insured and Uninsured Unemployment: Is There an Explanation?”
  15. (1973). Recovery from National Disasters: Insurance or Federal Aid,
  16. (1995). Search Activity Among Employed and Unemployed Members of the Workforce,”
  17. (1978). Specification Tests in
  18. (2000). The Demand for Flood Insurance: Empirical Evidence,”
  19. (1991). The Economics of Unemployment Insurance: The Case of Sweden,”
  20. (1995). The Impact of Unemployment Insurance Benefit Levels on Recipiency,”
  21. (1988). The Mirage of Private Unemployment Insurance,”
  22. (1974). The National Flood-Insurance Program—Problems and Potential,”
  23. (1999). Ti-årsoversig
  24. (1985). Unemployment and Mental Health: Some Evidence From Panel Data,”
  25. (1995). Unemployment Insurance Take-Up Rates in Canada: Facts, Determinants, and Implications,”
  26. (1997). Unemployment Insurance Takeup Rates and the AfterTax Value of Benefits,”
  27. (1911). Union Growth in Denmark,
  28. (1991). various years. Danmarks Statistik, IDA-En Integret Database for Arbejdsmarkedsforskning Hovedrapport, (IDA- An Integrated Data Base for Labour Market Research Main Report), (in Danish) Udgivet af Danmarks Statistiks,