The strangely-named AERådet (when I was young, it was known as Arbejderbevægelsens Erhvervsråd, or the Labour Movement Industrial Council, one of the first “think tanks” in Denmark), today published some figures about sickness benefits payments in Denmark.
From a Danish perspective there is nothing particularly surprising about the figures: As the economy has boomed and unemployment fallen steadily, so have sickness benefits payments increased just as steadily. The conventional interpretation is that 1) as unemployment falls, people with less than good health get work and 2) production demands take a heavy toll on the workforce.
There are of cause some problems with this interpretation: Women are traditionally more sick than men (women also live longer, as in all modern societies) and public sector employees are more sick than private sector employees. This means that other factors must play a role in sickness patterns – for one thing, we shouldn’t underestimate the role played by managements for keeping or undermining employees’ health.
But the really strange thing is that Sweden right now is seeing a different pattern. Where sickness-related absence from work or the labour market is pro-cyclical in Denmark, it tends to be counter-cyclical in Sweden. Basically, the weaker the labour market, the more sickness. (The women and public sector component also apply on this side of Øresund)
Swedish observers have long suggested some kind of substitution effect between unemployment benefits and sickness benefits were at work but in many ways the Danish and Swedish systems are similar. Following the labour market reforms of the 1990s, we might expect a stronger trend towards substitution of unemployment and sickness benefits in Denmark but this hasn’t happened.