The heterogeneous impact of stricter criteria for disability insurance

Abstract The Netherlands reformed its disability insurance (DI) scheme in 2006. Eligibility for DI became stricter, reintegration incentives became stronger, and DI benefits often became less generous. Based on administrative data on all individuals who reported sick shortly before and after the reform, difference-in-differences regressions show that the reform reduced DI receipt by 5.2 percentage points and increased labor participation and unemployment insurance (UI) receipt by 1.2 and 1.1 percentage points, respectively. It increased average monthly earnings and UI claims to overcompensate lost DI benefits. However, older individuals, women, individuals with temporary contracts, the u...

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