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Award Errors and Permanent Disability Benefits in Spain

Sergi Jimenez-Martin (), Jose Labeaga and Cristina Vilaplana Prieto

No 2006-18, Working Papers from FEDEA

Abstract: There is a controversial debate about the effects of permanent disability benefits on labor market behavior. In this paper we estimate equations for deserving and receiving disability benefits to evaluate the award error as the difference in the probability of receiving and deserving using survey data from Spain. Our results indicate that individuals aged between 55 and 59, self-employers or working in an agricultural sector have a probability of receiving a benefit without deserving it significantly higher than the rest of individuals. We also find evidence of gender discrimination since male have a significantly higher probability of receiving a benefit without deserving it. This seems to confirm that disability benefits are being used as an instrument for exiting the labor market for some individuals approaching the early retirement or those who do not have right to retire early. Taking into account that awarding process depends on Social Security Provincial Department, this means that some departments are applying loosely the disability requirements for granting disability benefits.

Date: 2006-09
New Economics Papers: this item is included in nep-lab
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Related works:
Working Paper: Award errors and permanent disability benefits in Spain (2007) Downloads
Working Paper: Award errors and permanent disability benefits in Spain (2006) Downloads
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