The impact of a disability insurance reform on spousal labour supply

  • Mario Bernasconi Mario Bernasconi

The Netherlands reformed its disability insurance (DI) scheme in 2006. We study the impact of the reform on the labor supply of people whose sick partners are affected by the reform. Difference-in-differences estimates suggest that the reform increased the labour participation of people, and that the e ect is persistent and constant in the ten years following sickness. On average, people increased labour participation by 0.7 percentage points, while the sick partners increased labour participation by 2.2 percentage points. The effect is substantially heterogeneous with respect to the type of employment contract of the sick partner. People increase their labour participation by 3.2 percentage points if their sick partner had a temporary contract, but they do not increase it if their sick partner had a permanent
contract.

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