Does Disability Insurance Improve Health and Well-Being?

Börsch-Supan, Axel (), Tabea Bucher-Koenen () and Felizia Hanemann ()
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Felizia Hanemann: Munich Center for the Economics of Aging (MEA), Postal: Amalienstr. 33, D-80799 Munich

No 201709, MEA discussion paper series from Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy

Abstract: The purpose of disability insurance (DI) is to protect people with health problems that limit their ability to work. We evaluate the effectiveness of DI benefit programs in delivering this protection by following people’s health and financial well-being after the take-up of DI benefits. This paper takes advantage of internationally harmonized panel data and the differences across DI programs in Europe and the United States, as well as their changes over time. We use several econometric approaches to account for the potential endogeneity of DI enrollment and sample selectivity. We find that self-reported health stabilizes after DI benefit receipt. Mental health improves more for DI benefit recipients than non-recipients relative to the beginning of DI benefit receipt. This effect is stronger in countries with more generous DI systems. The effects on objective health measures are positive but largely insignificant.

JEL-codes: H55 J21 J26 (search for similar items in EconPapers)
Date: 2017-12-18
New Economics Papers: this item is included in nep-hea and nep-ias
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