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Estimating the impact of experience rating on the inflow into disability insurance in the Netherlands

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Author Info
Pierre Koning

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Abstract

This paper examines the effects of experience rating on the inflow into disability insurance (DI) in the Netherlands, using unique longitudinal administrative data from the Dutch social benefit administration for the years 2000-2002. We follow a difference-in-differences approach to identify the impact of changes in DI premiums. In particular, due to unawareness of the experience rating system, employers seem to have been triggered to increase preventative activities, once they have experienced increases in DI premium ('ex post incentives').

We find the impact of experience rating to be substantial, amounting to a 15% reduction of the inflow into DI. This finding is robust with respect to various alternative specification alternatives.

We conclude that the decision of employers to increase preventative activities seems mainly an issue of being aware of the experience rating incentive.

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Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Discussion Papers with number 37.

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Date of creation: Aug 2004
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Handle: RePEc:cpb:discus:37

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Related research
Keywords: experience rating; disability; disability insurance; panel data;

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Find related papers by JEL classification:
H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
I12 - Health, Education, and Welfare - - Health - - - Health Production
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Buddelmeyer, Hielke, 2001. "Re-employment Dynamics of Disabled Workers," IZA Discussion Papers 269, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Olivier Blanchard & Jean Tirole, 2004. "Redesigning the Employment Protection System," De Economist, Springer, vol. 152(1), pages 1-20, 03. [Downloadable!]
  3. Patricia M. Anderson & Bruce D. Meyer, 1994. "The Effects of Unemployment Insurance Taxes and Benefits on Layoffs Using Firm and Individual Data," NBER Working Papers 4960, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Bruce Meyer, 2002. "Unemployment and workers' compensation programmes: rationale, design, labour supply and income support ," Fiscal Studies, Institute for Fiscal Studies, vol. 23(1), pages 1-49, March.
  5. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January. [Downloadable!] (restricted)
  6. Anderson, Patricia M. & Meyer, Bruce D., 2000. "The effects of the unemployment insurance payroll tax on wages, employment, claims and denials," Journal of Public Economics, Elsevier, vol. 78(1-2), pages 81-106, October. [Downloadable!] (restricted)
  7. Bruce, Christopher J & Atkins, Frank J, 1993. "Efficiency Effects of Premium-Setting Regimes under Workers' Compensation: Canada and the United States," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages S38-69, January. [Downloadable!] (restricted)
  8. Topel, Robert H, 1983. "On Layoffs and Unemployment Insurance," American Economic Review, American Economic Association, vol. 73(4), pages 541-59, September. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Anja Deelen, 2005. "Adverse selection in disability insurance: empirical evidence for Dutch firms," CPB Discussion Papers 46, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  2. Pierre Koning & Daniël van Vuuren, 2006. "Hidden unemployment in disability insurance in the Netherlands; an empirical analysis based on employer data," CPB Discussion Papers 69, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  3. Annemiek van VUren & Daniël van Vuuren, 2005. "Financial incentives in disability insurance in the Netherlands," CPB Discussion Papers 45, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
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