Employers Opting Out of Public Disability Insurance: Selection or Incentive Effects?

Wolter H.J. Hassink, Pierre Koning and Wim Zwinkels
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Wolter H.J. Hassink: Utrecht University School of Economics, the Netherlands
Wim Zwinkels: VU University Amsterdam, the Netherlands

No 15-081/V, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: This paper analyzes selection and incentive effects of opting out from public to private insurance on employer Disability Insurance (DI) inflow rates. We use administrative information on DI benefit costs and opting-out decisions of a balanced panel of about 140,000 employers that are observed between 2007 and 2011. We argue that the opting-out decision of employers was driven by current DI enrolment and anticipation effects that resulted from short-term expectations on DI costs. In particular, employers opted out when this was most rewarding for them in reducing DI premium rates. When controlling for these effects, our main finding is that there are no incentive effects due to opting out. Thus, publicly and privately insured employers show similar DI inflow rates.

Keywords: Public versus private insurance; Disability insurance; Opting out; Longitudinal analyses (search for similar items in EconPapers)
JEL-codes: C23 I13 (search for similar items in EconPapers)
Date: 2015-07-07
New Economics Papers: this item is included in nep-ias
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Employers Opting Out of Public Disability Insurance: Selection or Incentive Effects? (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20150081

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