Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/263380 
Year of Publication: 
2022
Series/Report no.: 
IZA Discussion Papers No. 15164
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Disability Insurance (DI) may affect workers' outcomes such as their probability to enter DI, to recover, and their employment. Supplementary insurance may increase these moral hazard effects, but also increases the financial gains of private insurers to reduce benefit costs. With increased insurer activities to prevent and reintegrate workers, the overall effects of increased insurance coverage on workers' outcomes are thus ambiguous. This paper aims to separate worker and insurer responses to increased insurance, using unique administrative data on firms' supplementary DI insurance contracts. Using a Two-Way Fixed-Effects model on the sickness and employment rates of worker cohorts with and without supplementary contracts at some point in time, we find that insurer efforts compensate workers' moral hazard effects.
Subjects: 
disability insurance
private insurance
moral hazard
insurer effort
return-to-work policies
JEL: 
G22
G52
J3
J21
Document Type: 
Working Paper

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