What is the focus of the paper?

This paper analyzes the effects of the ‘60+ fast-track measure’. The measure was introduced in October 2022 to reduce waiting times for disability insurance (DI) assessments, by eliminating the medical examination after two years of illness for long-term sick employees aged 60 and older. The study examines what this measure means for the number of DI applications and approvals, for composition of benefit types, and for employment outcomes such as return to work and labor earnings.

What are the key findings?

As a result of the measure, the number of DI applications increases only slightly (by 1.2 percentage points). This increase appears to emerge later in the period, consistent with gradual awareness of the measure among workers, employers, and caseworkers.

The number of approved DI benefits increases by 6.5 percentage points, considerably more than the increase in applications (1.2 percentage points). This suggests that a larger share of the target group enters DI, rather than that benefits are merely granted earlier, mainly driven by an increase in full (temporary) DI.

Employment declines: one year after the potential moment of DI entry, the probability of employment is 2.1 percentage points lower. This implies that for every 100 additional DI benefits, approximately 31 jobs disappear.

The composition of DI benefits shifts noticeably: fewer partial and permanent DI benefits, and more full temporary DI benefits, which involve weaker financial incentives to continue working (partially).

The effects are, on average, stronger for women, employees in the service sector and individuals in the lowest income quintile.

What are the implications?

  • The measure serves as an additional route to early retirement for older long-term sick employees, even when they still have some remaining work capacity. As a result, policies aimed at extending working lives may be undermined and pension accrual at the end of the career decreases.
  • The increased inflow into DI is likely to also affect reliance on supplementary disability pension arrangements linked to DI.