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The Employment Effect of Stricter Rules for Eligibility for DI: Evidence from a Natural Experiment in Sweden

Anders Karlström (), Mårten Palme () and Ingemar Svensson ()
Additional contact information
Anders Karlström: Systems Analysis and Economics, Royal Institute of Technology, Postal: Systems Analysis and Economics, Royal Institute of Technology, S-100 44 Stockholm, Sweden
Ingemar Svensson: Social Insurance Agency, Postal: Social Insurance Agency, S-103 51 Stockholm, Sweden

No 2008:3, Research Papers in Economics from Stockholm University, Department of Economics

Abstract: We study the effect of a reform of the Swedish disability insurance (DI) program whereby the special eligibility rules for workers in the age group 60 to 64 were abolished. First, we use a differences-in-differences approach to study changes in the disability take-up as compared to the age group 55 to 59. Then, we use a similar approach to study to what extent the employment effect of the reform is "crowded out" by an increase in the utilization of the sickpay insurance (SI) and/or the unemployment insurance (UI). In an extended analysis, we study the effect of firm closure on employment and the utilization of different labor market insurance programs in different age groups before and after the reform.

Keywords: Disability Insurance; Early Retirement (search for similar items in EconPapers)
JEL-codes: H53 H55 H59 J21 J26 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-ias and nep-lab
Date: 2008-04-11
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