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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. Copyright 2007 The Authors. Journal compilation CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd. 2007.

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
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    References listed on IDEAS

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    1. 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.
    2. 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. 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.
    2. Vendrik Maarten & Cörvers Frank, 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).
    3. repec:eee:labeco:v:47:y:2017:i:c:p:202-215 is not listed on IDEAS
    4. 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.
    5. 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.
    6. Bernal Lobato, N., 2014. "Essays in applied microeconomics," Other publications TiSEM 9b638b3d-2f83-452a-b2c8-c, Tilburg University, School of Economics and Management.
    7. 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.
    8. repec:wfo:wstudy:46905 is not listed on IDEAS
    9. Hugo Benítez-Silva & Richard Disney & Sergi Jiménez-Martín, 2010. "Disability, capacity for work and the business cycle: an international perspective," Economic Policy, CEPR;CES;MSH, vol. 25, pages 483-536, July.
    10. 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.
    11. Pierre Koning, 2009. "Experience Rating and the Inflow into Disability Insurance," De Economist, Springer, vol. 157(3), pages 315-335, September.
    12. 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 for the Study of Labor (IZA).

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