Unemployment in Scandinavia during an economic crisis: Cross-national differences in health selection

Are people with ill health more prone to unemployment during the ongoing economic crisis? Is this health selection more visible among people with low education, women, or the young? The current paper investigates these questions in the Scandinavian context using the longitudinal part of the EU-SILC data material. Generalized least squares analysis indicates that people with ill health are laid off to a higher degree than their healthy counterparts in Denmark, but not in Norway and Sweden. Additionally, young individuals (<30 years) with ill health have a higher probability of unemployment in both Norway and Sweden, but not in Denmark. Neither women with ill health, nor individuals with low educational qualifications and ill health, are more likely to lose their jobs in Scandinavia. Individual level (and calendar year) fixed effects analysis confirms the existence of health selection out of employment in Denmark, whereas there is no suggestion of health selection in Sweden and Norway, except among young individuals. This finding could be related to the differing labor market demand the three Scandinavian countries have experienced during and preceding the study period (2007-2010). Another possible explanation for the cross-national differences is connected to the Danish “flexicurity” model, where the employment protection is rather weak. People with ill health, and hence more unstable labor market attachment, could be more vulnerable in such an arrangement.