Empirical Essays on Education and Social Insurance Policies

Abstract: This thesis consists of four self-contained essays.Essay 1: This paper evaluates the ef­fects of the introduction of a more comprehensive upper secondary school system in Swe­den in the 1990s. The reform reduced the differences between the academic and vo­ca­­tio­nal edu­ca­tio­nal tracks through prolonging and substantially increasing the aca­demic content of all vo­­ca­tio­nal tracks. The effects of this policy change are identified by exploiting a six year pilot scheme, which preceded the actual reform in some municipalities. The results show that the pro­­longation of the vocational tracks brought about an increased pro­ba­bi­li­ty of drop­ping out among low performing students. Though one important motive be­hind the po­licy change was to enable all upper secondary school graduates to pursue a uni­versity de­­gree, I find no effects on university enrolment or graduation. There are some indications, however, that at­ten­ding the longer and more academic vo­ca­tional tracks may have led to in­creased earnings in the long run.Essay 2: (co-authored with Peter Fredriksson, Elly-Ann Johansson and Per Johansson) We examine whether the impact of pre-school interventions on cognitive skills differs by immigrant background. The analysis is based on Swedish data containing information on childcare attendance, rich family background information, the performance on cognitive tests at age 13, and long-run educational attainment for cohorts born between 1967 and 1982. We find that childcare attendance reduces the gap in language skills between children from immigrant backgrounds relative to native-born children. We find no differential effects on inductive skills, however. Nor does childcare appear to affect the distribution of long-run educational attainment.Essay 3: (co-authored with Laura Hartman) This paper studies a specific type of moral hazard that arises in the interplay between two large public insurance systems in Sweden, namely the sickness insurance (SI) and the unemployment insurance (UI). Moral hazard can arise from the structure of the benefit levels as for some unemployed persons benefits from the SI are higher than benefits from the UI. We use a reform of the SI system that came into force on 1 July 2003 to identify the effect of economic incentives arising from the different benefit levels. The purpose of the reform was to eliminate the difference in benefits between the two insurance systems. Our results from a duration analysis show clearly that the higher the sickness benefits, the higher the probability of reporting sick.Essay 4: Previous research suggests that there are substantial interactions between the un­­­­em­­ployment insurance (UI) and the sickness insurance (SI) in Sweden. Mo­ral ha­­zard arises in the interplay between these two social insurance systems, since by re­por­ting sick an unemployed person can postpone the UI expiration date and some­times also re­­ceive considerably higher benefits. This paper exa­mines whe­ther these inter­ac­­tions affect the transition rate from unemployment to em­ploy­ment. To stu­dy this question I utilize a reform which great­­ly re­­duced the incentives for un­em­ployed persons to transfer to the SI. While there is evi­dence that this reform sub­stantially lowered the incidence of sick re­ports among the un­em­ployed, I find no evidence suggesting that the reduced sick re­port rate in turn affected the transition rate to employment.