Long-term effects of individual placement and support services for disability benefits recipients with severe mental illnesses

This paper examines a broad set of short- and long-term impacts of Individual Placement and Support (IPS) for disability benefit recipients with severe mental disabilities. IPS is a specific intervention that first aims to place an individual in employment and subsequently trains the worker on the job. We compare the outcomes for IPS-recipients to a control group that received traditional vocational rehabilitation (TVR) services. We use administrative data to apply difference-in-difference estimation on a matched sample of 513 IPS recipients and almost 23,000 TVR-recipients in the Netherlands. Our results show that from six months after the start of the treatment onwards employment probabilities of IPS participants significantly outperform those of TVR participants. The higher probability to be in competitive employment does not come at the expense of fewer work in sheltered employment or trial periods. Nor do they come at the expense of shorter working hours or lower wages. The share of people on disability benefits declines equally in both group for quite some time after the start of the intervention but there is some indication that the benefit dependency in the long run declines faster for IPS recipients. Effects regarding medical costs are not statistically significant.