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time sickness benefits, to other sickness-related benefits, and the
return to work.
Method and data
Survival analysis is used to study the duration of sick leave periods.
We analyse sick leave periods starting between January 2002 and
December 2004, i.e., during the years before the reform was
introduced in January 2005. By studying sick leave periods starting in
different years before the reform, and controlling for the starting date
for each sick leave period, we can estimate the change in the duration
and the transition rates that coincided with the introduction of the
reform (1
st
of January 2005).
The identification of the effect of the reform is contingent on the
assumption that the changes in the duration and transition
probabilities at the turn of the reform year would have been the same
as for the previous years, had the reform not come into place in
January 2005.
The analysis uses longitudinal individual data on sick leave periods,
rehabilitation benefits and disability pensions taken from
administrative registers at the Social Insurance Agency. The data also
include a wide range of demographic and socioeconomic background
variables and information on the workplace (in November of each
year), i.e., industry codes, sectors and the size of the workplaces. The
analysis is restricted to individuals with gainful employment.
Findings and conclusions
Our analysis does not indicate a general decrease in the duration of
sickness benefit periods, which is why the reform can be said to have
had a fairly limited impact on sickness leave duration in general. The
study period was characterised by major policy changes, which
makes it difficult to distinguish the possible effects of the co-
financing reform from the potential effects of other changes in the
social security policy which occurred simultaneously.
Nevertheless, despite these difficulties, our analysis reveals a greater
propensity to transfer from full-time sickness benefits to
rehabilitation benefits in connection with the reform. Therefore, one
effect of the reform may have been a greater shift towards
rehabilitation among those with ongoing periods of full-time sickness