A microsimulation analysis of the 2006 regime change in the Dutch disability scheme
AbstractThis paper introduces a microsimulation model that simulates the budgetary impact of the 2006 regime change in the Dutch disability scheme. A dynamic population model fits the case of the disability benefits the best. As opposed to macro forecasts, a microsimulation can answer questions about the individual or meso income effects, the exact distribution of expenses among different benefits and the time path of the savings. The introduction of the proposed system change decreases the number of disability benefits by more than 25 % from 2020 onwards and reduces total costs by almost _ 2 billion or 20 %. Based on the better incentive structure, participation will increase and boost GDP. Microsimulation can be used to pick the winners and losers of the new system and give the time path of the savings. It is shown that for almost all partially disabled that are working, the total discounted income after the system change is as large as or larger than before the system change, for the non-working total discounted income is lower.
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Bibliographic InfoPaper provided by VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics in its series Serie Research Memoranda with number 0012.
Date of creation: 2005
Date of revision:
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Web page: http://www.feweb.vu.nl
Disability schemes; Incentive structures; Micro-simulation;
Other versions of this item:
- van Sonsbeek, J.M. & Gradus, R.H.J.M., 2006. "A microsimulation analysis of the 2006 regime change in the Dutch disability scheme," Economic Modelling, Elsevier, vol. 23(3), pages 427-456, May.
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-12-09 (All new papers)
- NEP-CMP-2005-12-09 (Computational Economics)
- NEP-EEC-2005-12-09 (European Economics)
- NEP-PBE-2005-12-09 (Public Economics)
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