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Assessing the effects of disability insurance experience rating. The case of The Netherlands

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  • de Groot, Nynke
  • Koning, Pierre

Abstract

Experience-rated disability insurance (DI) premiums are often advocated as a means to stimulate firms to reduce DI inflow and increase DI outflow. To assess the size of these intended effects of experience rating, this study provides an empirical analysis of the effects of DI experience rating in The Netherlands. We use a difference-in-difference approach with administrative matched firm- and worker data that exploits the removal of experience rating for small firms in 2003 and 2004. According to our results, removing experience rating caused an increase of DI inflow of about 7% for small firms, while DI outflow decreased by 12% as a result of the reform. We argue that these effects were largely confined to the first year of DI benefit receipt.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:labeco:v:41:y:2016:i:c:p:304-317
    DOI: 10.1016/j.labeco.2016.05.007
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    References listed on IDEAS

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    Cited by:

    1. Pierre Koning, 2016. "Privatizing sick pay: Does it work?," IZA World of Labor, Institute for the Study of Labor (IZA), pages 324-324, December.

    More about this item

    Keywords

    Disability insurance; Experience rating; Differences-in-differences;

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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