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Hidden Unemployment in Disability Insurance

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  • Pierre Koning
  • Daniel Van Vuuren

Abstract

. We estimate the fraction of hidden unemployment in the disability insurance (DI) inflow rate on the basis of a longitudinal administrative data set of Dutch employers for the period 1994–2003. This fraction can be identified by imposing so‐called exclusion restrictions on variables that are thought to impact the layoff rate but not disability risk. We find that the fraction of hidden unemployment in DI inflow amounts to 11 per cent. This implies that 2.6 per cent of all layoffs took place via the DI scheme. In addition, we find that this share has declined substantially over time, suggesting that various policy measures taken have been effective.

Suggested Citation

  • Pierre Koning & Daniel Van Vuuren, 2007. "Hidden Unemployment in Disability Insurance," LABOUR, CEIS, vol. 21(4‐5), pages 611-636, December.
    • Handle: RePEc:bla:labour:v:21:y:2007:i:4-5:p:611-636
    DOI: 10.1111/j.1467-9914.2007.00388.x
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    References listed on IDEAS

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    1. Pierre Koning, 2004. "Estimating the impact of experience rating on the inflow into disability insurance in the Netherlands," CPB Discussion Paper 37.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Krueger, Alan B. & Meyer, Bruce D., 2002. "Labor supply effects of social insurance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 33, pages 2327-2392, Elsevier.
    3. Kluve, Jochen & Fertig, Michael & Jacobi, Lena & Nima, Leonhard & Schaffner, Sandra & Schmidt, Christoph M. & Card, David & Góra, Marek & Jensen, Peter & Leetmaa, Reelika & Patacchini, Eleonora & van , 2005. "Study on the effectiveness of ALMPs: Research project for the European Commission, DG Employment, Social Affairs and Equal Opportunities. Final report," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 69929.
    4. Pierre Koning & Daniel van Vuuren, 2010. "Disability insurance and unemployment insurance as substitute pathways," Applied Economics, Taylor & Francis Journals, vol. 42(5), pages 575-588.
    5. Pierre Koning, 2004. "Estimating the impact of experience rating on the inflow into disability insurance in the Netherlands," CPB Discussion Paper 37, CPB Netherlands Bureau for Economic Policy Analysis.
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    Cited by:

    1. Hugo Benítez-Silva & Richard Disney & Sergi Jiménez-Martín, 2010. "Disability, capacity for work and the business cycle: an international perspective [Has the boom in incapacity benefit claimant numbers passed its peak?]," Economic Policy, CEPR;CES;MSH, vol. 25(63), pages 483-536.
    2. Noelia Bernal & Frederic Vermeulen, 2014. "The Impact of an Increase in the Legal Retirement Age on the Effective Retirement Age," De Economist, Springer, vol. 162(2), pages 115-145, June.
    3. Konle-Seidl, Regina, 2009. "Erfassung von Arbeitslosigkeit im internationalen Vergleich: Notwendige Anpassung oder unzulässige Tricks? (Counting the unemployed in international comparison: necessary adjustments or inadmissible t," IAB-Kurzbericht 200904, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Vendrik, M.C.M. & Cörvers, F., 2009. "Male and female labour force participation: the role of dynamic adjustments to changes in labour demand, government policies and autonomous trends," Research Memorandum 036, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    5. Octave De Brouwer & Elisabeth Leduc & Ilan Tojerow, 2019. "The Unexpected Consequences of Job Search Monitoring: Disability Instead of Employment ?," ULB Institutional Repository 2013/340666, ULB -- Universite Libre de Bruxelles.
    6. Koning, Pierre & van Sonsbeek, Jan-Maarten, 2017. "Making disability work? The effects of financial incentives on partially disabled workers," Labour Economics, Elsevier, vol. 47(C), pages 202-215.
    7. Konle-Seidl, Regina & Rhein, Thomas & Trübswetter, Parvati, 2014. "Arbeitsmärkte im europäischen Vergleich: Erwerbslose und Inaktive in verschiedenen Sozialsystemen (Labour markets in European comparison: Unemployed and inactive persons in different welfare states)," IAB-Kurzbericht 201408, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    8. Lammers, Marloes & Bloemen, Hans & Hochguertel, Stefan, 2013. "Job search requirements for older unemployed: Transitions to employment, early retirement and disability benefits," European Economic Review, Elsevier, vol. 58(C), pages 31-57.
    9. Bíró, Anikó & Elek, Péter, 2020. "Job loss, disability insurance and health expenditure," Labour Economics, Elsevier, vol. 65(C).
    10. Christine Mayrhuber & Silvia Rocha-Akis, 2013. "Anreizsysteme zur Weiterbeschäftigung älterer Arbeitnehmerinnen und Arbeitnehmer," WIFO Studies, WIFO, number 46905, Juni.
    11. Euwals, Rob & van Vuren, Annemiek & van Vuuren, Daniel, 2011. "The Decline of Early Retirement Pathways in the Netherlands: An Empirical Analysis for the Health Care Sector," IZA Discussion Papers 5810, Institute of Labor Economics (IZA).
    12. de Groot, Nynke & Koning, Pierre, 2016. "Assessing the effects of disability insurance experience rating. The case of The Netherlands," Labour Economics, Elsevier, vol. 41(C), pages 304-317.
    13. Pierre Koning & Maarten Lindeboom, 2015. "The Rise and Fall of Disability Insurance Enrollment in the Netherlands," Journal of Economic Perspectives, American Economic Association, vol. 29(2), pages 151-172, Spring.
    14. Halapuu, Vivika, 2021. "Access to education and disability insurance claims," Working Paper Series 2021:17, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    15. Pierre Koning, 2009. "Experience Rating and the Inflow into Disability Insurance," De Economist, Springer, vol. 157(3), pages 315-335, September.
    16. Bernal Lobato, N., 2014. "Essays in applied microeconomics," Other publications TiSEM 9b638b3d-2f83-452a-b2c8-c, Tilburg University, School of Economics and Management.

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