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A microsimulation analysis of the 2006 regime change in the Dutch disability scheme

  • van Sonsbeek, J.M.
  • Gradus, R.H.J.M.

This paper introduces a microsimulation model that simulates the budgetary impact of the 2006 regime change in the Dutch disability scheme. A dynamic population model fits the case of the disability benefits the best. As opposed to macro forecasts, a microsimulation can answer questions about the individual or meso income effects, the exact distribution of expenses among different benefits and the time path of the savings. The introduction of the proposed system change decreases the number of disability benefits by more than 25 % from 2020 onwards and reduces total costs by almost € 2 billion or 20 %. Based on the better incentive structure, participation will increase and boost GDP. Microsimulation can be used to pick the winners and losers of the new system and give the time path of the savings. It is shown that for almost all partially disabled that are working, the total discounted income after the system change is as large as or larger than before the system change, for the non-working total discounted income is lower.

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Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 23 (2006)
Issue (Month): 3 (May)
Pages: 427-456

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Handle: RePEc:eee:ecmode:v:23:y:2006:i:3:p:427-456
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/30411

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  1. Cathal O'Donoghue, 2001. "Dynamic Microsimulation: A Methodological Survey," Brazilian Electronic Journal of Economics, Department of Economics, Universidade Federal de Pernambuco, vol. 4(2), December.
  2. Klevmarken, N. Anders, 2001. "Micro Simulation - A Tool for Economic Analysis," Working Paper Series 2001:13, Uppsala University, Department of Economics.
  3. Sutherland, Holly & Taylor, Rebecca & Gomulka, Joanna, 2002. "Combining Household Income and Expenditure Data in Policy Simulations," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(4), pages 517-36, December.
  4. Amedeo Spadaro, 2005. "Micro-simulation and Normative Policy Evaluation: An Application to Some EU Tax Benefits Systems," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(4), pages 593-622, October.
  5. Nelissen, J.H.M., 1991. "Household and education projections by means of a microsimulation model," Other publications TiSEM b0e79871-8555-4a78-86d2-a, Tilburg University, School of Economics and Management.
  6. Jonathan Gruber, 2000. "Disability Insurance Benefits and Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 108(6), pages 1162-1183, December.
  7. John Creedy & Guyonne Kalb, 2005. "Behavioural Microsimulation Modelling for Tax Policy Analysis in Australia: Experience and Prospects," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 8(1), pages 73-110, March.
  8. Richard Blundell, 1992. "Labour supply and taxation: a survey," Fiscal Studies, Institute for Fiscal Studies, vol. 13(3), pages 15-40, January.
  9. François Bourguignon & Amadéo Spadaro, 2005. "Microsimulation as a tool for evaluating redistribution policies," PSE Working Papers halshs-00590863, HAL.
  10. Annemiek Vuren & Daniel Vuuren, 2007. "Financial Incentives in Disability Insurance in the Netherlands," De Economist, Springer, vol. 155(1), pages 73-98, March.
  11. Ed Westerhout, 2001. "Disability Risk, Disability Benefits, and Equilibrium Unemployment," International Tax and Public Finance, Springer, vol. 8(3), pages 219-244, May.
  12. Kapteyn, Arie & de Vos, Klaas, 1998. "Social Security and Labor-Force Participation in the Netherlands," American Economic Review, American Economic Association, vol. 88(2), pages 164-67, May.
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