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Evaluating the Impact of a Reduction in the Generosity of Disability Benefits: The 2008 Spanish Reform

Author

Listed:
  • Silva, José I.

    (University of Kent)

  • Vall Castello, Judit

    (University of Barcelona)

Abstract

We evaluate the effects of a reduction in the generosity of disability benefits in Spain that occurred in 2008. The main objective of the reform was to reduce the amount of benefits for individuals that do not have a long contributory history as the reform introduced a disincentive to apply to the system if the individual does not have 35 years of effective contributions. Theoretical insights are gained with a life-cycle model with heterogeneous disabled workers. The model's simulations predict a reduction in the incentives to apply for disability benefits for partially disabled individuals who do not reach the 35 years of contributions. Diff-in-diff estimates are consistent with our model predictions.

Suggested Citation

  • Silva, José I. & Vall Castello, Judit, 2012. "Evaluating the Impact of a Reduction in the Generosity of Disability Benefits: The 2008 Spanish Reform," IZA Discussion Papers 6482, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp6482
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    References listed on IDEAS

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    Cited by:

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    2. Christian Dudel, 2017. "Expanding the Markov chain tool box: distributions of occupation times and waiting times," MPIDR Working Papers WP-2017-017, Max Planck Institute for Demographic Research, Rostock, Germany.

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    Keywords

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    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health

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