Tightening the purse strings: the effect of stricter DI eligibility criteria on labor supply

Stefan Staubli

No 458, IEW - Working Papers from Institute for Empirical Research in Economics - University of Zurich

Abstract: This paper explores the labor supply effects of a large-scale policy change in the Austrian disability insurance program, which tightened eligibility criteria for men above a certain age. Using administrative data on the universe of Austrian private-sector employees, the results of difference-in-difference type regressions suggest a substantial and statistically significant decline in disability enrollment of 5-5.7 percentage points and a modest increase in employment of 1.4 to 2.7 percentage points. On the other hand, the policy change had important spillover effects into the unemployment and sickness insurance program. Specifically, the share of individuals receiving unemployment benefits increased roughly by 3 percentage points and the share receiving sickness insurance benefits by 0.6 percentage points.

Keywords: Disability insurance; eligibility criteria; labor supply; policy reform (search for similar items in EconPapers)
JEL-codes: H53 H55 J21 J64 J68 (search for similar items in EconPapers)
Date: 2009-11
New Economics Papers: this item is included in nep-ias
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Citations: View citations in EconPapers (1)

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https://www.zora.uzh.ch/id/eprint/51909/1/iewwp458.pdf (application/pdf)

Related works:
Working Paper: Tightening the Purse Strings: The Effect of Stricter DI Eligibility Criteria on Labor Supply (2009)
Working Paper: Tightening the Purse Strings: The Effect of Stricter DI Eligibility Criteria on Labor Supply (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:zur:iewwpx:458

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