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Does Disability Insurance Improve Health and Well-Being?

Author

Listed:
  • Börsch-Supan, Axel
  • Bucher-Koenen, Tabea
  • Hanemann, Felizia

    (Munich Center for the Economics of Aging (MEA))

Abstract

The purpose of disability insurance (DI) is to protect people with health problems that limit their ability to work. We evaluate the effectiveness of DI benefit programs in delivering this protection by following people’s health and financial well-being after the take-up of DI benefits. This paper takes advantage of internationally harmonized panel data and the differences across DI programs in Europe and the United States, as well as their changes over time. We use several econometric approaches to account for the potential endogeneity of DI enrollment and sample selectivity. We find that self-reported health stabilizes after DI benefit receipt. Mental health improves more for DI benefit recipients than non-recipients relative to the beginning of DI benefit receipt. This effect is stronger in countries with more generous DI systems. The effects on objective health measures are positive but largely insignificant.

Suggested Citation

  • Börsch-Supan, Axel & Bucher-Koenen, Tabea & Hanemann, Felizia, 2017. "Does Disability Insurance Improve Health and Well-Being?," MEA discussion paper series 201709, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    • Handle: RePEc:mea:meawpa:201709
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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