Assessing the Effects of Disability Insurance Experience Rating: The Case of the Netherlands

Nynke De Groot () and Pierre Koning
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Nynke De Groot: Free University Amsterdam

No 9742, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Experience rated Disability Insurance (DI) premiums are often advocated as a means to stimulate firms to reduce DI inflow and increase DI outflow. To assess the size of these intended effects of experience rating, this study provides an empirical analysis of the effects of DI experience rating in the Netherlands. We use a difference-in-difference approach with administrative matched firm and worker data that exploits the removal of experience rating for small firms in 2003 and 2004. According to our results, removing experience rating caused an increase of DI inflow of about 7% for small firms, while DI outflow decreased by 12% as a result of the reform. We argue that these effects were largely confined to the sickness period that preceded the DI claims assessment, as well as the first year of DI benefit receipt.

Keywords: differences-in-differences; experience rating; disability insurance (search for similar items in EconPapers)
JEL-codes: C23 H22 I12 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2016-02
New Economics Papers: this item is included in nep-ias and nep-lma
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Citations: View citations in EconPapers (16)

Published - published in: Labour Economics, 2016, 41, 304-317

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Journal Article: Assessing the effects of disability insurance experience rating. The case of The Netherlands (2016)
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