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A microsimulation analysis of the 2006 regime change in the Dutch disability scheme

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  • Sonsbeek, J.M. van

    (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics)

  • Gradus, R.H.J.M.

Abstract

This 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 Info

Paper provided by VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics in its series Serie Research Memoranda with number 0012.

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Date of creation: 2005
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Handle: RePEc:dgr:vuarem:2005-12

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Web page: http://www.feweb.vu.nl

Related research

Keywords: Disability schemes; Incentive structures; Micro-simulation;

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References

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  1. Cathal O'Donoghue, 2001. "Dynamic Microsimulation: A Methodological Survey," Brazilian Electronic Journal of Economics, Department of Economics, Universidade Federal de Pernambuco, vol. 4(2), December.
  2. Sutherland, Holly & Taylor, Rebecca & Gomulka, Joanna, 2002. "Combining Household Income and Expenditure Data in Policy Simulations," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(4), pages 517-36, December.
  3. François Bourguignon & Amedeo Spadaro, 2006. "Microsimulation as a tool for evaluating redistribution policies," Journal of Economic Inequality, Springer, vol. 4(1), pages 77-106, April.
  4. Ed Westerhout, 2001. "Disability Risk, Disability Benefits, and Equilibrium Unemployment," International Tax and Public Finance, Springer, vol. 8(3), pages 219-244, May.
  5. Klevmarken, N. Anders, 2001. "Micro Simulation - A Tool for Economic Analysis," Working Paper Series 2001:13, Uppsala University, Department of Economics.
  6. Annemiek van Vuren & Daniel van Vuuren, 2005. "Financial incentives in disability insurance in the Netherlands," CPB Discussion Paper 45, CPB Netherlands Bureau for Economic Policy Analysis.
  7. Kapteyn, Arie & de Vos, Klaas, 1998. "Social Security and Labor-Force Participation in the Netherlands," American Economic Review, American Economic Association, vol. 88(2), pages 164-67, May.
  8. Nelissen, J.H.M., 1991. "Household and education projections by means of a microsimulation model," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3969524, Tilburg University.
  9. Arie Kapteyn & Klaas de Vos, 1997. "Social Security and Retirement in The Netherlands," NBER Working Papers 6135, National Bureau of Economic Research, Inc.
  10. John Creedy & Guyonne Kalb, 2005. "Behavioural Microsimulation Modelling for Tax Policy Analysis in Australia: Experience and Prospects," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 8(1), pages 73-110, March.
  11. Soest, A.H.O. van & Woittiez, I.B. & Kapteyn, A.J., 1990. "Labor supply, income taxes and hours restrictions in the Netherlands," Open Access publications from Tilburg University urn:nbn:nl:ui:12-364378, Tilburg University.
  12. Richard Blundell, 1992. "Labour supply and taxation: a survey," Fiscal Studies, Institute for Fiscal Studies, vol. 13(3), pages 15-40, January.
  13. Jonathan Gruber, 1996. "Disability Insurance Benefits and Labor Supply," NBER Working Papers 5866, National Bureau of Economic Research, Inc.
  14. Amedeo spadaro, 2003. "Micro-simulation and Normative Policy Evaluation: an Application to some EU Tax-Benefits System," DELTA Working Papers 2003-23, DELTA (Ecole normale supérieure).
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Cited by:
  1. Jan-Maarten van Sonsbeek & j.m.van.sonsbeek@vu.nl, 2011. "Micro simulations on the effects of ageing-related policy measures: The Social Affairs Department of the Netherlands Ageing and Pensions Model," International Journal of Microsimulation, Interational Microsimulation Association, vol. 4(1), pages 72-99.
  2. van Sonsbeek, Jan-Maarten, 2010. "Micro simulations on the effects of ageing-related policy measures," Economic Modelling, Elsevier, vol. 27(5), pages 968-979, September.
  3. Zucchelli, E & Jones, A.M & Rice, N, 2010. "The evaluation of health policies through microsimulation methods," Health, Econometrics and Data Group (HEDG) Working Papers 10/03, HEDG, c/o Department of Economics, University of York.
  4. van Sonsbeek, Jan-Maarten & Alblas, Ridwan, 2012. "Disability benefit microsimulation models in the Netherlands," Economic Modelling, Elsevier, vol. 29(3), pages 700-715.
  5. Pilar García-Gómez & Hans-Martin Gaudecker & Maarten Lindeboom, 2011. "Health, disability and work: patterns for the working age population," International Tax and Public Finance, Springer, vol. 18(2), pages 146-165, April.

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