Does experience rating reduce disability inflow?

Tomi Kyyrä and Juha Tuomala

No 46, Working Papers from VATT Institute for Economic Research

Abstract: This study explores whether the experience rating of employers' disability insurance premiums affects the inflow of older employees to disability benefits in Finland. To identify the causal effect of experience rating, we exploit a pension reform that extended the coverage of the experience-rated premiums. The results show that a new disability benefit claim can cause substantial cost to the former employer through an increased premium. Nonetheless, we find no evidence of the significant effects of experience rating on the disability inflow. The lack of the behavioral effects may be due to the complexity of experience rating calculations and/or limited employer awareness.

Keywords: Experience rating, disability insurance, early retirement, Labour market, Työmarkkinat, Social security, Sosiaaliturva, Labor market and policies promoting economic growth, Työmarkkinat ja kasvua tukeva politiikka, H320 - Fiscal Policies and Behavior of Economic Agents: Firm, J140 - Economics of the Elderly; Economics of the Handicapped, J160 - Economics of Gender; Non-labor Discrimination, (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-age, nep-dem and nep-ias
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Citations: View citations in EconPapers (6)

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https://www.doria.fi/handle/10024/148785

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Working Paper: Does Experience Rating Reduce Disability Inflow? (2013)
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