Great Recession and disability insurance in Spain

Sergi Jimenez-Martin, Arnau Juanmarti Mestres and Judit Vall Castello

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: In this paper, we exploit the strong incidence of the Great Recession in Spain to estimate the effect of economic conditions on participation in Disability Insurance (DI). Using individual panel data, we show that increases in the local unemployment rate are associated with a reduction in the individual probability to enter the DI program during the Great Recession in Spain. Using aggregate data on applications, we show that this procyclical behavior of DI awards comes from an increase in the proportion of applications that are denied. Thus, contrary to the previous literature that has extensively reported a countercyclical behavior of DI participation, our results provide new evidence that, in periods of extremely recessionary conditions, DI participation may turn procyclical.

Keywords: Disability; Great Recession; labour market transitions (search for similar items in EconPapers)
JEL-codes: H55 I10 J14 (search for similar items in EconPapers)
Date: 2016-10, Revised 2017-04
New Economics Papers: this item is included in nep-eur
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Great Recession and disability insurance in Spain (2019)
Working Paper: Great Recession and Disability Insurance in Spain (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:1519

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