Socioeconomic differences in paid sickness allowances in Finland

Background Receipt of sickness allowance (SA), which in the Finnish benefit system functions as compensation for loss of income due to over 10-days-long sickness absence, is more prevalent in lower socioeconomic groups. As SA is an earnings-related benefit and higher occupational classes have on average higher previous income, their share of SA expenditure must be higher than their share of SA days would suggest. However, the allocation of SA costs to different socioeconomic groups is not known. The aim of this study was to compare occupational classes in terms of their shares of total paid SA days and SA benefit costs. Methods We used register data covering the total working-age (16-64) employed population of Finland at the end of 2016 (N = 2.2 million), with linked data on paid sickness allowances during 2017. Yearly accumulated sickness allowance days and allowance costs, paid by the Social Insurance Institution of Finland, were calculated for upper and lower non-manual employees, manual workers and self-employed persons. Results Of the total yearly SA days of the employed population, 13% were paid to upper non-manual employees, 40% to lower non-manual employees, 37% to manual workers and 10% to the self-employed (the respective shares of these occupational classes of the employed population were 23%, 36%, 30% and 11 %). The average gross allowance was 77€ per day among upper non-manuals and between 54€ and 60€ in the other groups. Accordingly, upper non-manuals accounted for a larger share of the SA costs compared to their share of SA days: the proportions of costs were 16%, 39%, 36% and 9% in each occupational class, respectively. Conclusions The results show that as the average amount of daily sickness allowance is distributed in an opposite manner compared to the prevalence and length of sickness allowance spells, socioeconomic differences in sickness allowance costs are smaller than differences in the prevalence of sickness allowance. Key messages Upper non-manual employees have a lower prevalence of sickness absence and shorter spells than other occupational groups. Because of higher earnings-related sickness allowance among upper non-manual employees, their share of sickness allowance costs is higher than their share of sickness allowance days.