How does the Swedish social insurance program affect labor supply, savings and income distribution?

Project leader

Funding source

Forte - Swedish Research Council for Health, Working Life and Welfare

Project Details

Start date: 01/01/2005
End date: 31/12/2006
Funding: 1200000 SEK


The purpose of this project is an empirical analysis of how the various components of the Swedish social insurance system affect individuals' behavior and incomes. The outcome is important for the overall economy's allocation of resources and the future possibilities of financing a generous welfare system. The area of study is relevant for the political agenda because reforms of several of the social insurance system are either being discussed or have already been implemented. A major reform of the public pension system was implemented in the late 1990s, and currently the future of the sickness insurance program is being discussed. Consequently, it is necessary to evaluate how the implemented reforms and possible redesign of other social insurance programs will affect participants' behavior and thereby the income distribution and possibilities for financing. Another important aspect of the analysis that has been discussed in the last few years is the interaction and possible substitution between the various social insurance programs. This further underscores the importance of the broad approach taken in this project. The project comprises five areas and we plan several studies within each area. The first area, social insurance and labor supply, builds on previous work by the project group. The purpose is to examine the extent to which economic incentives compared to institutions affect labor supply among older workers. The second area analyses the effects of the Swedish pension system on the income distribution while the third area looks at how the pension system has affected private savings. The fourth area of study examines how the various components in the social insurance system interact by formulating and estimating a full model of the social insurance system. The purpose of the fifth area is to analyze the implications of the pension system for participants' welfare.

Last updated on 2017-24-03 at 12:59