The impact of the disability insurance reform on work resumption and benefit substitution in the Netherlands

We evaluate the disability insurance reform introduced in 2006 in the Netherlands. Using unique administrative data on individuals who fall sick before and after the reform, we analyze how the reform affected labor participation and the use of benefits from alternative benefit programs. The results of the difference-in-difference regressions suggest that the stricter benefit regime of the reform limits the access to disability insurance substantially, and increases labor participation and unemployment benefit receipt to a limited extent. However, it increases wages earned and unemployment benefits received to sizable extents. The impact of the reform is persistent over time for disability benefit and labor participation and income. The reform is least effective for unemployed and older individuals who struggle most to resume working.

Netspar, Network for Studies on Pensions, Aging and Retirement, is a thinktank and knowledge network. Netspar is dedicated to promoting a wider understanding of the economic and social implications of pensions, aging and retirement in the Netherlands and Europe.

MORE ABOUT NETSPAR


Mission en strategy           •           Network           •           Organisation           •          Magazine
Board Brief            •            Actionplan 2023-2027           •           Researchagenda

ABOUT NETSPAR

Our partners

vu
NN_logo_gray
B20190901_nidi-logo_greyscale
B20160708_apg
B20160708_ministeries
View all partners