A Decision for the Individual or the Collective? Membership in Sickness Insurance Funds in Swedish Manufacturing, circa 1900

Maria Stanfors, Lund University
Tobias Karlsson, Lund University
Lars-Fredrik Andersson, Department of Economic History, Umeå University, Umeå
Liselotte Eriksson, Umeå University

Industrialization brought significant economic and social changes. As a response, the birth of modern industrial society came with social movements that addressed that progress, prosperity and well-being did not benefit all equally. Mutual aid societies gained momentum from the mid-nineteenth century onwards as a way for individuals to handle risks associated with industrial wage work. In this paper, we study micro-level determinants of membership in sickness insurance funds among male workers in Swedish manufacturing, circa 1900. We analyze the decision to join sickness insurance funds by drawing on a cost-benefit framework factoring in industry-specific risk. We use matched employer-employee data compiled from archival records, based on industrial workers (> 25,000) in tobacco, printing, and mechanical engineering. The data cover all workers (i.e. members and non-members) and firms in a specific year. Such data are extremely rare for the period. After describing selection patterns into sickness insurance funds, we analyze membership determinants, exploiting variation at both individual and firm level. We find that, in general, individual characteristics like age and experience were not important for membership. Having breadwinner responsibilities, however, mattered for male workers’ membership in sickness insurance funds, and so did tenure but for contractual rather than economic reasons. The results hold up for within-firm estimates. Workers who joined sickness insurance funds in Sweden around the turn of the last century were slightly positively selected, but most importantly forward-looking, which indicates ’propitious selection’ and that sickness insurance funds attracted conscious workers at the turn of the last century.

No extended abstract or paper available

 Presented in Session 120. Health, Public Intervention and Insurance