Lars Skipper

Reducing Entitlements in Sickness Insurance

In a study using evidence from a Danish natural experiment, Lars Skipper, together with M. Rosholm and K. Sørensen, study the effects a major reform in the Danish sickness insurance system in the summer of 2014. With the reform, sickness benefits recipients risked having their benefits lowered after five months but at the same time, it became easier to continue receiving the benefits beyond the pre-reform time limit of 12 months. The researchers utilized this natural experiment to study how the universe of Danish sick-listed workers responded to these changes. They found that long-term sick-listed workers were remarkably responsive to economic incentives: They determined that the hazard back to work jumps upwards by 40% after five months where after-tax benefits become at risk of being lowered by 21%. The hazard back to work drops by 40% when the possibility of extension materializes after 12 months. Because of these two counter-acting effect, the net-decrease of expected sickness-duration drops by a mere two percent. There is no indication that the dramatic increase in the hazard back to work resulted in worse future attachment to the labor market.

Mr. Skipper’s academic interests lie within Labor, Education, and Health Economics. A recent publication with co-authors Black and Smith explores the use and importance of firm training. Current work also studies the link between absence and business cycles as well as how pollution affects children’s test scores.

Lars Skipper is an Associate Professor at the Department of Economics and Business Economics, Aarhus University. He was until recently the Director Center for Labour Market Research and Impact Studies (CAFÉ) and was previously the first Director of Studies of the successful Public Policy program at Aarhus University. He was a visiting scholar at the University of Wisconsin-Madison (2019–20). He hold a PhD and an MSc in Economics from Aarhus University.