EconPapers    
Economics at your fingertips  
 

Do disability benefits hinder work resumption after recovery?

Pierre Koning (), Paul Muller () and Roger Prudon

Journal of Health Economics, 2022, vol. 82, issue C

Abstract: While a large share of Disability Insurance recipients in OECD countries are expected to recover, outflow rates from temporary disability schemes are typically negligible. We estimate the disincentive effects of disability benefits on the response to a (mental) health improvement using administrative data on all Dutch disability benefit applicants. We compare those below the DI eligibility threshold with those above and find that disincentives significantly reduce work resumption after health improves. Approximately half of the response to recovery is offset by benefits. Estimates from a structural labor supply model suggest that disincentives are substantially larger when the worker’s earnings capacity is fully restored.

Keywords: Disability insurance; Mental health; Labor supply; Health shocks (search for similar items in EconPapers)
JEL-codes: I1 J08 J22 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167629622000133
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Do Disability Benefits Hinder Work Resumption after Recovery? (2020) Downloads
Working Paper: Do Disability Benefits Hinder Work Resumption After Recovery? (2020) Downloads
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:eee:jhecon:v:82:y:2022:i:c:s0167629622000133

DOI: 10.1016/j.jhealeco.2022.102593

Access Statistics for this article

Journal of Health Economics is currently edited by J. P. Newhouse, A. J. Culyer, R. Frank, K. Claxton and T. McGuire

More articles in Journal of Health Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2022-09-13
Handle: RePEc:eee:jhecon:v:82:y:2022:i:c:s0167629622000133