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Institutional rules, labour demand and retirement through disability programme participation

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  • Ossi Korkeamäki
  • Tomi Kyyrä

Abstract

We use matched employer-employee data from Finland to model transitions out of work into sick leave and disability retirement. To identify the role of institutional factors we exploit reforms that changed medical requirements for disability pension eligibility and experience-rated employer contributions. We find that transitions to sick leave and disability pension benefits are relatively rare in growing establishments, but rather common in establishments with a high degree of excess worker turnover. We also show that transitions to disability retirement depend on the stringency of medical screening and the degree of experience rating applied to the employer.

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Bibliographic Info

Paper provided by Government Institute for Economic Research Finland (VATT) in its series Working Papers with number 16.

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Date of creation: 27 Sep 2010
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Handle: RePEc:fer:wpaper:16

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Keywords: Disability pension; sick leave; experience rating;

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  1. Jonathan Gruber, 2000. "Disability Insurance Benefits and Labor Supply," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 108(6), pages 1162-1183, December.
  2. Tuomas Pekkarinen & Roope Uusitalo & Sari Kerr, 2009. "School tracking and development of cognitive skills," Working Papers, Government Institute for Economic Research Finland (VATT) 2, Government Institute for Economic Research Finland (VATT).
  3. Dan Black & Kermit Daniel & Seth Sanders, 2002. "The Impact of Economic Conditions on Participation in Disability Programs: Evidence from the Coal Boom and Bust," American Economic Review, American Economic Association, American Economic Association, vol. 92(1), pages 27-50, March.
  4. David H. Autor & Mark G. Duggan, 2006. "The Growth in the Social Security Disability Rolls: A Fiscal Crisis Unfolding," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 20(3), pages 71-96, Summer.
  5. Miikka Rokkanen & Roope Uusitalo, 2013. "Changes in Job Stability – Evidence from Lifetime Job Histories," Finnish Economic Papers, Finnish Economic Association, Finnish Economic Association, vol. 26(2), pages 36-55, Autumn.
  6. Seppo Kari & Hanna Karikallio & Jukka Pirttilä, 2009. "The impact of dividend taxation on dividends and investment: New evidence based on a natural experiment," Working Papers, Government Institute for Economic Research Finland (VATT) 9, Government Institute for Economic Research Finland (VATT).
  7. Tomi Kyyrä & Ralf A. Wilke, 2007. "Reduction in the Long-Term Unemployment of the Elderly: A Success Story from Finland," Journal of the European Economic Association, MIT Press, MIT Press, vol. 5(1), pages 154-182, 03.
  8. Gielen, Anne C. & van Ours, Jan C., 2005. "Age-Specific Cyclical Effects in Job Reallocation and Labor Mobility," IZA Discussion Papers 1670, Institute for the Study of Labor (IZA).
  9. Nilsson Hakkala, Katariina & Heyman, Fredrik & Sjöholm, Fredrik, 2008. "Multinational Firms and Job Tasks," Working Paper Series, Research Institute of Industrial Economics 781, Research Institute of Industrial Economics.
  10. Sanna-Mari Hynninen & Aki Kangasharju & Jaakko Pehkonen, 2009. "Matching Inefficiencies, Regional Disparities, and Unemployment," LABOUR, CEIS, CEIS, vol. 23(3), pages 481-506, 09.
  11. Jarkko Harju, 2009. "Voluntary pension savings: the effects of the Finnish tax reform on savers' behaviour," Working Papers, Government Institute for Economic Research Finland (VATT) 7, Government Institute for Economic Research Finland (VATT).
  12. David H. Autor & Mark G. Duggan, 2003. "The Rise In The Disability Rolls And The Decline In Unemployment," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 118(1), pages 157-205, February.
  13. Duncan McVicar, 2008. "Why Have Uk Disability Benefit Rolls Grown So Much?," Journal of Economic Surveys, Wiley Blackwell, Wiley Blackwell, vol. 22(1), pages 114-139, 02.
  14. Michele Campolieti, 2004. "Disability Insurance Benefits and Labor Supply: Some Additional Evidence," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 22(4), pages 863-890, October.
  15. Hassink, R. & Ours, J.C. van & Ridder, G., 1997. "Dismissal through disability," Open Access publications from Tilburg University urn:nbn:nl:ui:12-86871, Tilburg University.
  16. Mari Rege, Kjetil Telle & Mark Votruba, 2005. "The Effect of Plant Downsizing on Disability Pension Utilization," Discussion Papers, Research Department of Statistics Norway 435, Research Department of Statistics Norway.
  17. Pierre Koning, 2009. "Experience Rating and the Inflow into Disability Insurance," De Economist, Springer, Springer, vol. 157(3), pages 315-335, September.
  18. Ilja Kristian Kavonius, 2010. "Fiscal policies in Europe and the United States during the Great Depression," Working Papers, Government Institute for Economic Research Finland (VATT) 13, Government Institute for Economic Research Finland (VATT).
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