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The Employment Effect of Stricter Rules for Eligibility for DI: Evidence from a Natural Experiment in Sweden

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Author Info

  • Karlström, Anders

    ()
    (Systems Analysis and Economics, Royal Institute of Technology)

  • Palme, Mårten

    ()
    (Dept. of Economics, Stockholm University)

  • Svensson, Ingemar

    ()
    (Social Insurance Agency)

Abstract

We study the effect of a reform of the Swedish disability insurance (DI) program whereby the special eligibility rules for workers in the age group 60 to 64 were abolished. First, we use a differences-in-differences approach to study changes in the disability take-up as compared to the age group 55 to 59. Then, we use a similar approach to study to what extent the employment effect of the reform is "crowded out" by an increase in the utilization of the sickpay insurance (SI) and/or the unemployment insurance (UI). In an extended analysis, we study the effect of firm closure on employment and the utilization of different labor market insurance programs in different age groups before and after the reform.

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Bibliographic Info

Paper provided by Stockholm University, Department of Economics in its series Research Papers in Economics with number 2008:3.

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Length: 33 pages
Date of creation: 11 Apr 2008
Date of revision:
Handle: RePEc:hhs:sunrpe:2008_0003

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Postal: Department of Economics, Stockholm, S-106 91 Stockholm, Sweden
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Web page: http://www.ne.su.se/
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Keywords: Disability Insurance; Early Retirement;

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References

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  1. 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, vol. 118(1), pages 157-205, February.
  2. Marten Palme & lngemar Svensson, 1999. "Social Security, Occupational Pensions, and Retirement in Sweden," NBER Chapters, in: Social Security and Retirement around the World, pages 355-402 National Bureau of Economic Research, Inc.
  3. Palme, Mårten & Svensson, Ingemar, 2001. "Income Security Programs and Retirement in Sweden," Working Paper Series in Economics and Finance 422, Stockholm School of Economics.
  4. repec:ebl:ecbull:v:10:y:2003:i:3:p:1-7 is not listed on IDEAS
  5. Jeffrey M. Wooldridge, 2003. "Cluster-Sample Methods in Applied Econometrics," American Economic Review, American Economic Association, vol. 93(2), pages 133-138, May.
  6. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2002. "How Much Should We Trust Differences-in-Differences Estimates?," NBER Working Papers 8841, National Bureau of Economic Research, Inc.
  7. Stephen G. Donald & Kevin Lang, 2007. "Inference with Difference-in-Differences and Other Panel Data," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 221-233, May.
  8. Eklöf, Matias & Hallberg, Daniel, 2004. "Private Alternatives and Early Retirement Programs," Working Paper Series 2004:5, Uppsala University, Department of Economics.
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