Change search
ReferencesLink to record
Permanent link

Direct link
Sickness absence and health care in an economic federation
Umeå University, Faculty of Social Sciences, Department of Economics.
2007 (English)In: International Tax and Public Finance, ISSN 0927-5940, E-ISSN 1573-6970, Vol. 14, no 4, 503-524 p.Article in journal (Refereed) Published
Abstract [en]

This paper addresses vertical fiscal externalities in a model where the state governments provide health care and the federal government provides a sickness benefit. Both levels of government tax labor income and policy decisions affect labor income as well as participation in the labor market. The results show that the vertical externality affecting the state governments' policy decisions can be either positive or negative depending on, among other things, the wage elasticity of labor supply and the marginal product of expenditure on health care. Moreover, it is proved that the vertical fiscal externality will not vanish by assigning all powers of taxation to the states.

Place, publisher, year, edition, pages
2007. Vol. 14, no 4, 503-524 p.
Keyword [en]
economic federation, moral hazard, vertical fiscal externalities, sickness absence, sickness benefits
National Category
URN: urn:nbn:se:umu:diva-16210DOI: 10.1007/s10797-007-9028-xISI: 000248178200009OAI: diva2:155883
Available from: 2008-06-19 Created: 2008-06-19 Last updated: 2014-10-09Bibliographically approved
In thesis
1. Economic policy in health care: Sickness absence and pharmaceutical costs
Open this publication in new window or tab >>Economic policy in health care: Sickness absence and pharmaceutical costs
2007 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This thesis consists of a summary and four papers. The first two concerns health care and sickness absence, and the last two pharmaceutical costs and prices.

Paper [I] presents an economic federation model which resembles the situation in, for example, Sweden. In the model the state governments provide health care, the fed-eral government provides a sickness benefit and both levels tax labor income. The re-sults show that the states can have either an incentive to under- or over-provide health care. The federal government can, by introducing an intergovernmental transfer, in-duce the state governments to provide the socially optimal amount of health care.

In Paper [II] the effect of aggregated public health care expenditure on absence from work due to sickness or disability was estimated. The analysis was based on data from a panel of the Swedish municipalities for the period 1993-2004. Public health care expenditure was found to have no statistically significant effect on absence and the standard errors were small enough to rule out all but a minimal effect. The result held when separate estimations were conducted for women and men, and for absence due to sickness and disability.

The purpose of Paper [III] was to study the effects of the introduction of fixed pharmaceutical budgets for two health centers in Västerbotten, Sweden. Estimation results using propensity score matching methods show that there are no systematic differences for either price or quantity per prescription between health centers using fixed and open-ended budgets. The analysis was based on individual prescription data from the two health centers and a control group both before and after the introduction of fixed budgets.

In Paper [IV] the introduction of the Swedish substitution reform in October 2002 was used as a natural experiment to examine the effects of increased consumer infor-mation on pharmaceutical prices. Using monthly data on individual pharmaceutical prices, the average reduction of prices due to the reform was estimated to four percent for both brand name and generic pharmaceuticals during the first four years after the reform. The results also show that the price adjustment was not instant.

Place, publisher, year, edition, pages
Umeå: Institutionen för nationalekonomi, Umeå universitet, 2007. 127 p.
Umeå economic studies, ISSN 0348-1018 ; 710
vertical fiscal externalities, sickness absence, sickness benefits, health care expenditure, fixed budgets, pharmaceuticals, cost containment, dynamic panel data models, endogeneity, propensity score matching
National Category
urn:nbn:se:umu:diva-1137 (URN)978-91-7264-331-4 (ISBN)
Public defence
2007-06-08, Hörsal F, Humanisthuset, Umeå Universitet, Umeå, 13:15
Available from: 2007-05-11 Created: 2007-05-11 Last updated: 2010-10-25Bibliographically approved

Open Access in DiVA

Sickness absence and health care in an economic federation(261 kB)18 downloads
File information
File name FULLTEXT01.pdfFile size 261 kBChecksum SHA-512
Type fulltextMimetype application/pdf

Other links

Publisher's full text

Search in DiVA

By author/editor
Granlund, David
By organisation
Department of Economics
In the same journal
International Tax and Public Finance

Search outside of DiVA

GoogleGoogle Scholar
Total: 18 downloads
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

Altmetric score

Total: 39 hits
ReferencesLink to record
Permanent link

Direct link