Johannes Hagen gets article published
Johannes Hagen together with co-author Hannes Malmberg (University of Minnesota) had their article published in Social Policy & Administration entitled: “A cofinancing model for disability insurance and local government employers”
Employer cofinancing in disability insurance (DI) systems aims to reduce the inflow to DI by making employers internalise their DI costs. The authors develop a cofinancing model for the local government sector in Sweden inspired by the literature on yardstick competition. In the system, local governments are responsible for the DI of their employees, while being compensated by the central government for their expected DI payments. The arrangement essentially eliminates the large fiscal externalities associated with DI. Also, the arrangement can be implemented within current administrative setups, and the design credibly ensures that no extra costs are imposed on the local government sector in the aggregate.