Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/229704
Authors: 
Koning, Pierre
Muller, Paul
Prudon, Roger
Year of Publication: 
2020
Series/Report no.: 
Tinbergen Institute Discussion Paper No. TI 2020-084/V
Abstract: 
While a large share of Disability Insurance recipients are expected to recover, outflow rates from temporary disability schemes are typically negligible. We estimate the disincentive effects of disability benefits on the response to a (mental) health improvement using administrative data on all Dutch disability benefit applicants. We compare those below the DI eligibility threshold with those above and find that disincentives significantly reduce work resumption after health improves. Approximately half of the response to recovery is offset by benefits. Structural labor supply model estimates suggest disincentive effects are substantially larger when the workers’ earnings capacity is fully restored.
Subjects: 
Disability insurance
Mental health
Labor supply
Health shocks
JEL: 
J08
I1
J22
Document Type: 
Working Paper

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