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Award errors and permanent disability benefits in Spain

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  • Sergi Jiménez-Martín

    ()

  • José M. Labeaga
  • Cristina Vilaplana Prieto

Abstract

There is a controversial debate about the effects of permanent disability benefits on labor market behavior. In this paper we estimate equations for deserving and receiving disability benefits to evaluate the award error as the difference in the probability of receiving and deserving using survey data from Spain. Our results indicate that individuals aged between 55 and 59, self-employers or working in an agricultural sector have a probability of receiving a benefit without deserving it significantly higher than the rest of individuals. We also find evidence of gender discrimination since male have a significantly higher probability of receiving a benefit without deserving it. This seems to confirm that disability benefits are being used as an instrument for exiting the labor market for some individuals approaching the early retirement or those who do not have right to retire early. Taking into account that awarding process depends on Social Security Provincial Department, this means that some departments are applying loosely the disability requirements for granting disability benefits.

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Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 966.

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Date of creation: May 2006
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Handle: RePEc:upf:upfgen:966

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Keywords: Disability benefits; Award error; Early retirement; Social security;

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References

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Citations

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Cited by:
  1. Pilar García-Gómez & Sergi Jiménez-Martín & Judit Vall Castelló, 2011. "Health, Disability and Pathways into Retirement in Spain," NBER Chapters, in: Social Security Programs and Retirement around the World: Historical Trends in Mortality and Health, Employment, and Disability Insurance Participatio National Bureau of Economic Research, Inc.
  2. Hugo Benítez-Silva & Richard Disney & Sergi Jiménez Martín, 2009. "Disability, Capacity for Work and the Business Cycle: An International Perspective," Working Papers 2009-28, FEDEA.
  3. Sergi Jiménez-Martín & José M. Labeaga & Cristina Vilaplana Prieto, 2006. "A sequential model of older workers' labor force transitions after a health shock," Health Economics, John Wiley & Sons, Ltd., vol. 15(9), pages 1033-1054.
  4. Judit Vall Castello, 2010. "Promoting Employment of Disabled Women in Spain; Evaluating a Policy," Working Papers 2010-10, FEDEA.
  5. Solé, Meritxell & Diaz-Serrano, Luis & Rodriguez Martinez, Marisol, 2010. "Work, Risk and Health: Differences between Immigrants and Natives in Spain," IZA Discussion Papers 5338, Institute for the Study of Labor (IZA).

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