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Sickness absence in Sweden : A study of early retirement and sickness absence

by Najafi, Maja; Wollbratt, Marcus

Abstract (Summary)
The purpose of this thesis has been to analyse seven major factors that tend to influence the rate of early retirement in Sweden. The scope of data was gathered for every municipality in Sweden. Economic theories of labour supply, Moral Hazard, Adverse Selection and the Insurance Model were used to analyse the empirical results. In the analysis, earlier studies of the rate of sickness absence were important and used as a framework in choosing the explanatory variables for the econometric model. The analysed variables were; average income, average sickness days, educational level, foreign born, public sector employment, unemployment and the share of women in the population. As a consequence of the rift that occurred in 2003, when the average sickness days decreased and disbursed early retirements simultaneously increased, the relationship between these two variables was given special attention. The empirical findings confirmed our conjectures and were consistent with earlier research. Average income and the level of education were negatively related to the rate of early retirement. Moreover foreign born, average sickness days and unemployment showed a positive relation to early retirement. The relationship between average sickness days and early retirement had statistically changed and decreased between the years. A possibility is that other factors, such as changed social norms and increased stress in society (which are difficult to measure in a statistical and economical sense) might have become more relevant in explaining the rate of early retirement.
Bibliographical Information:

Advisor:

School:Högskolan i Jönköping

School Location:Sweden

Source Type:Master's Thesis

Keywords:sickness compensation social norms incentives moral hazard adverse selection labour supply absenteeism early retirement

ISBN:

Date of Publication:02/12/2008

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