Disability insurance and unemployment insurance as substitute pathways

$53.17 plus tax (Refund Policy)

Buy Article:

Abstract:

In this article, we estimate the degree of substitution between enrolment into Disability Insurance (DI) and Unemployment Insurance (UI) in the Netherlands. Starting in the 1990s many policy measures aimed at reducing DI enrolment, and increase labour force participation. We quantify whether these policy measures have led to a reduction in hidden unemployment in DI. A side effect of the reforms may be increased pressure on UI. Therefore, we simultaneously estimate reverse substitution, that is, hidden disability in UI. To this end, we employ a sample of firms in the Dutch AVO database from the period 1993 to 2002. Using instrumental variables in a bivariate Tobit specification, we identify the hidden components in both respective schemes. The estimation results indicate that about 3% of all dismissals took place through DI, which implies that about one quarter of the DI enrolments observed in our sample in fact consists of hidden unemployment. We find no evidence for reverse substitution of disabled persons ending up in UI.

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00036840701704436

Affiliations: 1: Delft University of Technology, Institute for Public Sector Efficiency, 2600 GA Delft, The Netherlands 2: Delft University of Technology, Institute for Public Sector Efficiency, 2600 GA Delft, The Netherlands,CPB Netherlands Bureau for Economic Policy Analysis, 2508 GM Den Haag, The Netherlands

Publication date: February 1, 2010

More about this publication?
Related content

Share Content

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
X
Cookie Policy
ingentaconnect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more