7(23)
2
Sickness absence in Sweden
The 1990s’ economic crisis constituted a shift in the dependence of public
social insurance (including the unemployment insurance) in Sweden. Most
of the economic recovery late in the decade was offset by a rapidly
increased inflow to sick leave and disability benefits. In 2003, Sweden
reported the highest sick-leave rate in the EU-15, with almost 4.4% of the
employed absent due to sickness. Since then, both the inflow to the SI and
the sick-spell durations has dropped (see Figure 1). The high levels, the
large variation over time and the strong pro-cyclical pattern have been
received as evidence of a dysfunctional SI, inappropriately used and
afflicted by considerable levels of moral hazard. The measures taken to
reduce sickness absence have correspondingly targeted institutional
changes and the strengthening of the incentives among all actors to
restrain the use of the SI. For instance, in 2004, the period for which the
employer is responsible for compensation was prolonged from 14 to 21
days. This change was reversed in 2005, when besides the first 14 days,
the employers also co-financed 15% of the compensation for the remaining
days of the sickness absence period. Probably the most important change,
however, was the restructuring of the Swedish Social Insurance Agency in
2005, centralizing the 21 semi-autonomous regional offices into one
administration. This made possible more consistent and higher quality
delivery of frontline services. Together with targeted efforts to change
social attitudes and norms associated with reporting sick, this is generally
agreed to be the main reason for the fall in the sick-leave rate among
policy makers and analysts.
The Alliance of Sweden Government came into office in 2006 with an
outspoken aim to restore the work-first principle and to prevent social
exclusion due to long-term benefit receipt. The resulting reformation,
considered the largest ever in the SI history, was for the most part initiated
in 2008 and concerned changes in both the incentives to receive
compensation from SI and active measures to support return to work.
Negative incentives were introduced with the reduction of the benefit level
after one year on sick leave, and the limit for the maximum number of
entitlement days. Since an important explanation for the high Swedish
sickness absence probably was the lack of a time limit, these changes were
expected to stabilize sickness absence at lower levels. Also, people entitled
to permanent disability benefits before July 2008 were henceforth allowed
to earn up to €4,280 (≈SEK 42,800) per year before their benefit was
progressively reduced. This positive incentive reform was motivated by the
belief that many in the 1990s and the early 2000s were transferred to
disability benefits without a thorough assessment of their working capacity.
Finally, to support the individuals’ possibilities to return to work, the
government introduced a
rehabilitation guarantee program
, offering
cognitive therapy and multidiscipline treatment for people diagnosed with
mental health conditions.
The most radical change in the SI system, however, was the introduction of
the
rehabilitation-chain model
, with eligibility checks at fixed sick-spell
durations. The model is described in the following section.
