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Fundamentally Reforming the DI System: Evidence from German Notch Cohorts

Author

Listed:
  • Bjoern Fischer
  • Bjoern Fischer
  • Nicolas R. Ziebarth
  • Nicolas R. Ziebarth

Abstract

In 2001, Germany abolished public occupational disability insurance (ODI)—the second tier of public DI—for post-1960 cohorts. First, overall DI inflows decreased by a third in the long run. Second, representative data show at best modest increases in private ODI take-up in an individual risk-rated market without guaranteed issue. Third, an equilibrium model featuring interactions between the safety net, the first tier of public DI, and the private market illustrates that coverage denials and weak insurance demand due to complementary social insurance produce modest private ODI take-up with steep gradients by income and health. Finally, we simulate complementary reforms.

Suggested Citation

  • Bjoern Fischer & Bjoern Fischer & Nicolas R. Ziebarth & Nicolas R. Ziebarth, 2022. "Fundamentally Reforming the DI System: Evidence from German Notch Cohorts," NBER Working Papers 30812, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:30812
    Note: AG EH LS PE
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    Citations

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    Cited by:

    1. Yaming Cao & Björn Fischer-Weckemann & Johannes Geyer & Nicolas Ziebarth, 2026. "Fundamentally Reforming the DI System: Evidence from Germany," Discussion Papers of DIW Berlin 2157, DIW Berlin, German Institute for Economic Research.
    2. Pichler, Stefan & Ziebarth, Nicolas R., 2024. "Sick Leave and Medical Leave in the United States: A Categorization and Recent Trends," IZA Policy Papers 206, Institute of Labor Economics (IZA).
    3. Ahammer, Alexander & Packham, Analisa, 2025. "Disability insurance screening and worker health," Journal of Health Economics, Elsevier, vol. 101(C).
    4. Collischon, Matthias & Hiesinger, Karolin & Pohlan, Laura, 2023. "Disability and Labor Market Performance," IZA Discussion Papers 16100, IZA Network @ LISER.

    More about this item

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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