Disability insurance and unemployment insurance as substitute pathways

Pierre Koning, Daniël van Vuuren

Research output: Contribution to journalArticleScientificpeer-review

Abstract

In this article, we estimate the degree of substitution between enrolment into Disability Insurance (DI) and Unemployment Insurance (UI) in the Netherlands. Starting in the 1990s many policy measures aimed at reducing DI enrolment, and increase labour force participation. We quantify whether these policy measures have led to a reduction in hidden unemployment in DI. A side effect of the reforms may be increased pressure on UI. Therefore, we simultaneously estimate reverse substitution, that is, hidden disability in UI. To this end, we employ a sample of firms in the Dutch AVO database from the period 1993 to 2002. Using instrumental variables in a bivariate Tobit specification, we identify the hidden components in both respective schemes. The estimation results indicate that about 3% of all dismissals took place through DI, which implies that about one quarter of the DI enrolments observed in our sample in fact consists of hidden unemployment. We find no evidence for reverse substitution of disabled persons ending up in UI.
Original languageEnglish
Pages (from-to)575-588
JournalApplied Economics
Volume42
Issue number10
DOIs
Publication statusPublished - 2010
Externally publishedYes

Fingerprint

Disability insurance
Unemployment insurance
Substitute
Pathway
Substitution
Enrollment
Unemployment
Policy measures
Data base
Side effects
Labor force participation
Tobit
Instrumental variables
The Netherlands

Cite this

@article{270818b6e459486bb5494ab9afb3211c,
title = "Disability insurance and unemployment insurance as substitute pathways",
abstract = "In this article, we estimate the degree of substitution between enrolment into Disability Insurance (DI) and Unemployment Insurance (UI) in the Netherlands. Starting in the 1990s many policy measures aimed at reducing DI enrolment, and increase labour force participation. We quantify whether these policy measures have led to a reduction in hidden unemployment in DI. A side effect of the reforms may be increased pressure on UI. Therefore, we simultaneously estimate reverse substitution, that is, hidden disability in UI. To this end, we employ a sample of firms in the Dutch AVO database from the period 1993 to 2002. Using instrumental variables in a bivariate Tobit specification, we identify the hidden components in both respective schemes. The estimation results indicate that about 3{\%} of all dismissals took place through DI, which implies that about one quarter of the DI enrolments observed in our sample in fact consists of hidden unemployment. We find no evidence for reverse substitution of disabled persons ending up in UI.",
author = "Pierre Koning and {van Vuuren}, Dani{\"e}l",
year = "2010",
doi = "10.1080/00036840701704436",
language = "English",
volume = "42",
pages = "575--588",
journal = "Applied Economics",
issn = "0003-6846",
publisher = "Routledge",
number = "10",

}

Disability insurance and unemployment insurance as substitute pathways. / Koning, Pierre; van Vuuren, Daniël.

In: Applied Economics, Vol. 42, No. 10, 2010, p. 575-588.

Research output: Contribution to journalArticleScientificpeer-review

TY - JOUR

T1 - Disability insurance and unemployment insurance as substitute pathways

AU - Koning, Pierre

AU - van Vuuren, Daniël

PY - 2010

Y1 - 2010

N2 - In this article, we estimate the degree of substitution between enrolment into Disability Insurance (DI) and Unemployment Insurance (UI) in the Netherlands. Starting in the 1990s many policy measures aimed at reducing DI enrolment, and increase labour force participation. We quantify whether these policy measures have led to a reduction in hidden unemployment in DI. A side effect of the reforms may be increased pressure on UI. Therefore, we simultaneously estimate reverse substitution, that is, hidden disability in UI. To this end, we employ a sample of firms in the Dutch AVO database from the period 1993 to 2002. Using instrumental variables in a bivariate Tobit specification, we identify the hidden components in both respective schemes. The estimation results indicate that about 3% of all dismissals took place through DI, which implies that about one quarter of the DI enrolments observed in our sample in fact consists of hidden unemployment. We find no evidence for reverse substitution of disabled persons ending up in UI.

AB - In this article, we estimate the degree of substitution between enrolment into Disability Insurance (DI) and Unemployment Insurance (UI) in the Netherlands. Starting in the 1990s many policy measures aimed at reducing DI enrolment, and increase labour force participation. We quantify whether these policy measures have led to a reduction in hidden unemployment in DI. A side effect of the reforms may be increased pressure on UI. Therefore, we simultaneously estimate reverse substitution, that is, hidden disability in UI. To this end, we employ a sample of firms in the Dutch AVO database from the period 1993 to 2002. Using instrumental variables in a bivariate Tobit specification, we identify the hidden components in both respective schemes. The estimation results indicate that about 3% of all dismissals took place through DI, which implies that about one quarter of the DI enrolments observed in our sample in fact consists of hidden unemployment. We find no evidence for reverse substitution of disabled persons ending up in UI.

U2 - 10.1080/00036840701704436

DO - 10.1080/00036840701704436

M3 - Article

VL - 42

SP - 575

EP - 588

JO - Applied Economics

JF - Applied Economics

SN - 0003-6846

IS - 10

ER -