Travail et économie publique externe

Du 08/12/2016 de 13:00 à 14:15

Campus jourdan, Bâtiment G, Rez de chaussée, Salle 10

LINDEBOOM Maarten (VU Amsterdam)

Disability Insurance reforms and employment of impaired workers

The Dutch Disability Insurance (DI) system was internationally known for its extremely high enrolment rates that led some researchers even to classify it as the most out of control disability program of OECD countries (Burkhauser et al., 2008). Indeed, expressed as a percentage of the insured working population, DI enrolment increased rapidly to around 12% in the mid-eighties and then remained more or less constant at this unprecedented level until the beginning of the 21th century. From then on some radical reforms were implemented that were very effective in curbing DI inflow and DI enrolment. It has been argued that the introduction of the gatekeepers protocol and the drastic reform of the Dutch DI system in 2006 has been responsible for this huge drop in DI inflow rates. The main goal of these reforms was to reduce DI inflow, to increase employment rates of workers with disabilities and to ensure that benefits were provide to those who really needed them. The latter refers to the issue of targeting efficiency. First evidence suggests that the reforms were indeed very successful in reducing DI inflow. Less clear is whether the reforms did increase employment rates and improved targeting efficiency. Increased stringency of the program may on the one hand reduce the number of false positives, but may also increase false rejections and induced perverse self-screening, meaning that part of the truly sick may not apply. The main objective of this paper is to look at these issues. More specifically, we first use administrative individual level data from Statistics Netherlands and the Dutch National Spcial Insurance Institute (NSII) to examine recent trends in the employment gap of healthy and unhealthy workers. We use individual level hospitalization rates to define the worker’s health status. We next examine the sensitivity of DI application rates to changes in the stringency of the award process. We then look at employment rates of awarded and rejected applicants and examine trends in the mortality rate of these groups. We combine the results of our analyses to infer whether increases in the DI stringency efficiently targeted their incentive effects to the more able individuals.