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Disability Retirement in a Welfare State

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  • Bratberg, Espen

Abstract

The increasing number of disability pensioners may put a strain on the welfare state. In this paper, the authors try to assess the effect of financial incentives on disability entrance. A sample of Norwegians on long-term sick leave at the beginning of 1989 is examined as of the end of 1989, and the exit routes are studied in a multinomial logit model. The results indicate that the incentive effects of wages are larger than the disincentive effects of benefits. Furthermore, there is no evidence that having a 'subjective' diagnosis affects the probability of becoming a disability pensioner. Copyright 1999 by The editors of the Scandinavian Journal of Economics.

Suggested Citation

  • Bratberg, Espen, 1999. " Disability Retirement in a Welfare State," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(1), pages 97-114, March.
  • Handle: RePEc:bla:scandj:v:101:y:1999:i:1:p:97-114
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    Cited by:

    1. Gordon B. Dahl & Andreas Ravndal Kostøl & Magne Mogstad, 2014. "Family Welfare Cultures," The Quarterly Journal of Economics, Oxford University Press, vol. 129(4), pages 1711-1752.
    2. Peter Haan & Michal Myck, 2009. "Dynamics of Poor Health and Non-employment," SOEPpapers on Multidisciplinary Panel Data Research 195, DIW Berlin, The German Socio-Economic Panel (SOEP).
    3. Holen , Dag S., 2007. "Disabillity Pension Motivated Income Adjustment," Memorandum 17/2008, Oslo University, Department of Economics.
    4. Iskhakov, Fedor, 2008. "Dynamic Programming Model of Health and Retirement," Memorandum 03/2008, Oslo University, Department of Economics.
    5. Bratsberg, Bernt & Fevang, Elisabeth & Røed, Knut, 2010. "Disability in the Welfare State: An Unemployment Problem in Disguise?," IZA Discussion Papers 4897, Institute for the Study of Labor (IZA).
    6. Bratsberg, Bernt & Fevang, Elisabeth & Røed, Knut, 2013. "Job loss and disability insurance," Labour Economics, Elsevier, vol. 24(C), pages 137-150.
    7. Andreas Ravndal Kostol & Magne Mogstad, 2014. "How Financial Incentives Induce Disability Insurance Recipients to Return to Work," American Economic Review, American Economic Association, vol. 104(2), pages 624-655, February.
    8. Guðmundur Guðmundsson, 2000. "Prospects of Icelandic pension funds," Economics wp06, Department of Economics, Central bank of Iceland.
    9. Hanel, Barbara, 2012. "The effect of disability pension incentives on early retirement decisions," Labour Economics, Elsevier, vol. 19(4), pages 595-607.
    10. Iskhakov, Fedor, 2008. "Pension Reforms in Norway: Evidence from a Structural Dynamic Model," Memorandum 14/2008, Oslo University, Department of Economics.
    11. Haan, Peter & Myck, Michal, 2009. "Dynamics of health and labor market risks," Journal of Health Economics, Elsevier, vol. 28(6), pages 1116-1125, December.
    12. Holen, Dag S., 2007. "It Ain't Necessariy So," Memorandum 19/2008, Oslo University, Department of Economics.

    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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