We study the welfare effects of disability insurance (DI) and derive social-optimality conditions for the two main DI policy parameters: (i) DI eligibility rules and (ii) DI benefits. Causal evidence from two DI reforms in Austria generate fiscal multipliers (total over mechanical cost...

Using Dutch administrative data, we assess the work and earnings capacity of disability insurance (DI) recipients by estimating employment and earnings responses to benefit cuts. Reassessment of DI entitlement under more stringent criteria removed 14.4 percent of recipients from the program and...

Most countries reduce Disability Insurance (DI) benefits for beneficiaries earning above a specified threshold. Such an earnings threshold generates a discontinuous increase in tax liability – a notch – and creates an incentive to keep earnings below the threshold. Exploiting such a notch in...

In the past two decades the OECD has regularly voiced concern about the labor market exclusion of people with disabilities and about the cost of disability insurance programs. This paper examines whether the fundamental disability insurance reforms that were implemented in the Netherlands have...

This paper exploits rarely-used longitudinal data to examine the impacts of disability onset on benefit receipt in Britain over the period 2004–2012. Differences in the timing of onset are exploited for identification in a framework that combines propensity score matching with...

Social protection systems play a key stabilising role for individuals and societies, especially in the recent context of heightened uncertainties. Income stabilisation and related social policy objectives hinge on the extent to which social protection is accessible for those requiring support....

In most disability insurance programs beneficiaries lose some or all of their benefits if they earn above an earnings threshold. While intended to screen out applicants with high remaining working capacity, earnings limits can also distort the labor supply of beneficiaries. We develop a simple...

Between 2005 and 2020, Belgium experienced a significant rise in the recipiency rate of long-term disability insurance (DI), rising from 3.5% to 6.8%. In this paper, we examine the potential factors driving this increase by exploiting administrative micro-level data covering the Belgian...

The paper examines the possible effects of introducing a large-scale welfare reform in Sweden, namely, the introduction of comprehensive welfare accounts. Under this policy, individuals make mandatory contributions to accounts, which they can top up with voluntary contributions. In return,...

The analysis provides a new explanation for two widespread problems concerning European unemployment policy: the disappointingly small effect of many past reform measures on unemployment, and the political difficulties in implementing more extensive reform programs. We argue that the heart of...