Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/300965 
Year of Publication: 
2024
Series/Report no.: 
IZA Discussion Papers No. 17069
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We study the role that firms play in social insurance benefit uptake after their workers experience health shocks. Social insurance in our setting, Hungary, is universal and comprehensive, thus allowing us to quantify the heterogeneous impact of firms on benefit uptake and labor market outcomes on top of the social safety net. Using matched employer-employee administrative data linked to individual-level health records, we find that firm responses to worker health shocks are heterogeneous. Workers hit by a health shock at high-quality firms are less likely to take up disability insurance or exit the labor force than those at low-quality firms. These empirical patterns are consistent with worker-firm match quality increasing in firm quality in a setting where recovery from health shocks is uncertain. Our results imply that beyond higher wages, high-quality firms also offer more protection against the consequences of health shocks. This suggests that heterogeneous firm behavior should be taken into account when designing social insurance policies.
Subjects: 
health shock
disability insurance
firm heterogeneity
JEL: 
H55
I10
J22
J23
Document Type: 
Working Paper

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