Screening Stringency in the Disability Insurance Program
-
Per Johansson
Abstract
We propose a strategy for assessing how the inflow to the disability insurance program has been governed over time. Using ex-post mortality, we analyze the ex-ante health of individuals entering the program, compared to individuals not entering the program in the same year. Applying this strategy to Sweden, we find large variation in the relative health of new beneficiaries compared to non-beneficiaries over time. Some of the fluctuations correspond well to formal changes to screening stringency. However, we also find large variation in health during periods when no changes to formal eligibility criteria have been pursued.
Acknowledgments
We are thankful for comments from Marcus Eliason, John Ham, Karl-Oskar Lindgren, Martin Lundin, Eva Mörk, Mårten Palme and Josef Zweimüller. We thank the editor and the anonymous referee for their useful suggestions in improving the paper. We also thank seminar participants at the Institute for Evaluation of Labour Market and Education Policy and the Department of Economics, Uppsala University. Lisa Laun and Tobias Laun gratefully acknowledge financial support from Jan Wallander and Tom Hedelius Foundation.
References
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- 1
See, e.g. Wise (2012) for a detailed description of DI programs in several developed countries.
- 2
See Krueger and Meyer (2002) for a review of several studies.
- 3
See, e.g. Bound and Burkhauser (1999) and Duggan and Imberman (2009).
- 4
See, e.g. Burkhauser et al. (2002).
- 5
The total compensation rate, including occupational insurances, is about 80% for workers in the private and local government sector and about 85% for workers in the central government sector, for earnings below the ceiling. Sjögren Lindquist and Wadensjö (2007) estimate that 96% of Swedish workers are covered by a collective agreement allowing for occupational insurance and that almost all of these workers fulfill the criteria for receiving occupational insurance. Between 60 and 80% of workers claim occupational insurance when receiving disability benefits.
- 6
This assumption is not very restrictive and can be motivated by a disutility of working which is decreasing in health. In other words, a healthy individual has a low disutility of working as well as a low probability of receiving disability benefits. This makes working more attractive than applying for disability benefits. An individual in bad health, on the other hand, faces a large disutility of working while at the same time having a high probability of applying successfully, which makes applying for disability benefits more attractive than working.
- 7
This change resembles the results of Parsons (1991) who shows that the composition of disability benefit applicants depends, among other things, on the stringency of the screening process. However, he considers only two health classes, disabled and able.
- 8
There are examples of using mortality as a measure of work capacity in the literature. For example, Milligan and Wise (2012).
- 9
This is primarily a concern if such an effect is heterogeneous in the population. A homogeneous effect would shift the estimated mortality ratio but not affect the variation over time, which is what we are interested in analyzing in this paper.
- 10
Most individuals remain in the DI program until retirement. The simplification to regard the first year of benefit collection as the entry year leads to only 2.4% of the registrations of program participation not corresponding to the data.
- 11
The transitory spike in entry in 1992 is not reflected in a change in how program inflow was governed. Anecdotal evidence suggests that a shortage of caseworkers led to a queue of cases during the preceding years and that the spike in 1992 is due to a shifting of assessments across years. This would explain that the mortality ratio is unaffected.
- 12
Recall that we control for the relatively lower mortality of women compared to men in the population by estimating the parameter
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©2014 by Walter de Gruyter Berlin / Boston
Artikel in diesem Heft
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Artikel in diesem Heft
- Frontmatter
- Advances
- Preferential Admission and MBA Outcomes: Mismatch Effects by Race and Gender
- Quantity Uncertainty and Demand: The Case of Water Smart Reader Ownership
- Contributions
- Employment Effects of the 2009 Minimum Wage Increase: New Evidence from State-Based Comparisons of Workers by Skill Level
- Introducing Carbon Taxes in Russia: The Relevance of Tax-Interaction Effects
- Estimating Parents’ Valuations of Class Size Reductions Using Attrition in the Tennessee STAR Experiment
- Local Option, Alcohol and Crime
- To Work or Not to Work? The Effect of Childcare Subsidies on the Labour Supply of Parents
- Understanding Ransom Kidnappings and Their Duration
- Screening Stringency in the Disability Insurance Program
- Sticks and Carrots in Procurement: An Experimental Exploration
- Peer Effects and Policy: The Relationship between Classroom Gender Composition and Student Achievement in Early Elementary School
- Topics
- Competition and Innovation in Product Quality: Theory and Evidence from Eastern Europe and Central Asia
- Trading the Television for a Textbook?: High School Exit Exams and Student Behavior
- The Effect of Parental Migration on the Educational Attainment of Their Left-Behind Children in Rural China
- Do Parents’ Social Skills Influence Their Children’s Sociability?
- The Role of Infrastructure in Mitigating Poverty Dynamics: The Case of an Irrigation Project in Sri Lanka
- Congestion of Academic Journals Under Papers’ Imperfect Selection
- Endogenous Merger with Learning
- Do Low-Skilled Migrants Contribute More to Home Country Income? Evidence from South Asia
- The Minimum Wage and Crime
