EconPapers    
Economics at your fingertips  
 

A burden too big to bear? The effect of experience‐rated disability insurance premiums on firm bankruptcies and employment

Nynke de Groot and Pierre Koning ()

Scandinavian Journal of Economics, 2022, vol. 124, issue 1, 214-242

Abstract: We study whether experience rating for disability insurance (DI) affects the labor costs of firms and the probability of bankruptcy. The experience rating requires firms to contribute to the DI benefit costs of their workers. We use matched worker–firm data of the Netherlands, where the DI premium of firms is a function of historic disability risks. To measure the effect of experience‐rated premiums, we exploit exogenous changes in the schedule that determines the firms’ DI premiums. We find that higher premiums increase not only labor costs but also the probability of firm bankruptcy. These effects are concentrated on small firms.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1111/sjoe.12460

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:scandj:v:124:y:2022:i:1:p:214-242

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0347-0520

Access Statistics for this article

Scandinavian Journal of Economics is currently edited by Richard Friberg, Matti Liski and Kjetil Storesletten

More articles in Scandinavian Journal of Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2023-01-31
Handle: RePEc:bla:scandj:v:124:y:2022:i:1:p:214-242