On Mixed Systems of Public and Private Administration of Social Insurance
| Author | Pierre Koning |
| DOI | 10.1177/138826270600800403 |
| Published date | 01 December 2006 |
| Date | 01 December 2006 |
| Subject Matter | Article |
European Jour nal of Social Sec urity, Volume 8 (2006), No. 4 381
ON MIXED SYSTEMS OF PUBLIC AND PRIVATE
ADMINISTRATION OF SOCIAL INSURANCE
P K*
Abstract
As in many other countries, the administration of disability and unemployment
insurance in the Netherlands is c arried out by both public and private organisations.
In this article, we sketch the major dilemmas in the (mixed) provision of social
insurance and discuss the variou s types of arrangements that prevail. In doing so, we
particularly focus on current administrative arrangements in the Netherlands. We
also raise a number of research questions that are relevant for policy but are as yet
unexplored, partic ularly with respect to mixed systems.
1. INTRODUCTION
When discussing the design of the administration of social insurance1, one of the
key tradeo s faced is that between adverse selection and moral hazard.2 Organising
insurance as a publ ic monopoly in a n obligatory system ensures coverage of all r isks,
as well as solida rity between people with low and hig h risks. Typically, such a system
is applied uniformly, i.e. without any di erentiation in bene t conditions according
to risks. us, adverse selection—leading to under-insurance—is minimised. At
the same time, however, a public monopoly has limited incentives to limit the use
of insurance. is holds both for the admission of new claimants, as well as for the
organisation of welfare-to-work and the monitoring of existing claimants. us,
* CPB Netherlands Bu reau for Economic Policy Analys is, P.O.Box 80510, 2508 G M e Hague, e
Netherlands. Tel: +31 10 3383489, E-mail: pwck@cpb.nl. e aut hor would like to t hank Ruud
de Mooij and Alex Ar mstrong, as well as two an onymous referees, for their comment s on earlier
versions of this note.
1 Within the context of t his note, soc ial insu rance is de ned as obligator y disabi lity a nd unemployment
schemes and statutor y bene t conditions th at are uniformly de ned.
2 See e.g. Dixit (2002) for a ri gorous description of these t wo types of informat ion problems, as well
as applications to va rious sectors.
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