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The employment effect of stricter rules for eligibility for DI: Evidence from a natural experiment in Sweden

  • Karlström, Anders
  • Palme, Mårten
  • Svensson, Ingemar

We study the effect of a reform of the Swedish disability insurance (DI) program whereby the special eligibility rules for workers in the age group 60 to 64 were abolished. First, we use a differences-in-differences approach to study changes in the disability take-up as compared to the age group 55 to 59. Then, we use a similar approach to study to what extent the employment effect of the reform is "crowded out" by an increase in the utilization of the sickpay insurance (SI) and/or the unemployment insurance (UI). In an extended analysis, we study the effect of firm closure on employment and the utilization of different labor market insurance programs in different age groups before and after the reform.

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Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 92 (2008)
Issue (Month): 10-11 (October)
Pages: 2071-2082

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Handle: RePEc:eee:pubeco:v:92:y:2008:i:10-11:p:2071-2082
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505578

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  1. Mårten Palme & Ingemar Svensson, 2004. "Income Security Programs and Retirement in Sweden," NBER Chapters, in: Social Security Programs and Retirement around the World: Micro-Estimation, pages 579-642 National Bureau of Economic Research, Inc.
  2. Campolieti, Michele, 2002. "Disability and the labor force participation of older men in Canada," Labour Economics, Elsevier, vol. 9(3), pages 405-432, July.
  3. Marten Palme & lngemar Svensson, 1999. "Social Security, Occupational Pensions, and Retirement in Sweden," NBER Chapters, in: Social Security and Retirement around the World, pages 355-402 National Bureau of Economic Research, Inc.
  4. Eklöf, Matias & Hallberg, Daniel, 2004. "Private Alternatives and Early Retirement Programs," Working Paper Series 2004:5, Uppsala University, Department of Economics.
  5. Stephen G. Donald & Kevin Lang, 2007. "Inference with Difference-in-Differences and Other Panel Data," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 221-233, May.
  6. repec:ebl:ecbull:v:10:y:2003:i:3:p:1-7 is not listed on IDEAS
  7. David H. Autor & Mark G. Duggan, 2003. "The Rise In The Disability Rolls And The Decline In Unemployment," The Quarterly Journal of Economics, MIT Press, vol. 118(1), pages 157-205, February.
  8. Jeffrey M. Wooldridge, 2003. "Cluster-Sample Methods in Applied Econometrics," American Economic Review, American Economic Association, vol. 93(2), pages 133-138, May.
  9. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2002. "How Much Should We Trust Differences-in-Differences Estimates?," NBER Working Papers 8841, National Bureau of Economic Research, Inc.
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