Wednesday, May 09, 2007

Disability Benefits in Sweden

In recent years, there has been a boom in sickness and disability in Sweden. Thirteen percent of working-age Swedes live on some type of disability benefit. That is the highest proportion in the world. Yet, Swedes are the healthiest people in the world, according to the WHO. There are several dynamics at work. Sweden has a very generous welfare system. The government trusts people to be honest. Benefits are easy to get. Therefore, fraud has crept into the system. [This is known in the insurance business as moral hazard.]

But things are changing. The system cost too much and cannot be sustained. The government is cracking down. People are losing their benefits. People are being told to return to work, the gravy is over. For example, Lotta Landstrom has lost her sick benefits after two years. (Lotta is allergic to electricity, says her doctor.) Unfortunately, the government is having to provide training to people who need it because they have been out of the labor force for so long. [Ain't socialism grand, folks?]

[Wall Street Journal]

1 comment:

ALD said...

Apparently 300,000 people in Sweden suffer from this "malady" and receive government benefits. That's over 3% of the population - the statistical equivalent of ten million people in the US.

But instead of suspecting fraud some people are actually stupid enough to think it is a good idea for the UK to follow Sweden's lead.