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Disability Retirement in a Welfare State

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  • Espen Bratberg

Abstract

The increasing number of disability pensioners may put a strain on the welfare state. In this paper, we try to assess the effect of financial incentives on disability entrance. A sample of Norwegians on long‐term sick leave at the beginning of 1989 is examined as of the end of 1989, and the exit routes are studied in a multinomial logit model. The results indicate that the incentive effects of wages are larger than the disincentive effects of benefits. Furthermore, there is no evidence that having a “subjective” diagnosis affects the probability of becoming a disability pensioner. JEL Classification: H55; I18; J26

Suggested Citation

  • Espen Bratberg, 1999. "Disability Retirement in a Welfare State," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(1), pages 97-114, March.
    • Handle: RePEc:bla:scandj:v:101:y:1999:i:1:p:97-114
    DOI: 10.1111/1467-9442.00143
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    Cited by:

    1. Duncan McVicar, 2008. "Why Have Uk Disability Benefit Rolls Grown So Much?," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 114-139, February.
    2. Iskhakov, Fedor, 2008. "Pension Reforms in Norway: Evidence from a Structural Dynamic Model," Memorandum 14/2008, Oslo University, Department of Economics.
    3. Gordon B. Dahl & Andreas Ravndal Kostøl & Magne Mogstad, 2014. "Family Welfare Cultures," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(4), pages 1711-1752.
    4. Barbara Hanel, 2010. "Disability Pensions and Labor Supply," Working Papers 086, Bavarian Graduate Program in Economics (BGPE).
    5. Peter Haan & Michal Myck, 2009. "Dynamics of Poor Health and Non-employment," SOEPpapers on Multidisciplinary Panel Data Research 195, DIW Berlin, The German Socio-Economic Panel (SOEP).
    6. Holen , Dag S., 2007. "Disabillity Pension Motivated Income Adjustment," Memorandum 17/2008, Oslo University, Department of Economics.
    7. Iskhakov, Fedor, 2008. "Dynamic Programming Model of Health and Retirement," Memorandum 03/2008, Oslo University, Department of Economics.
    8. Daniela-Emanuela Danacica, 2023. "Unemployment Of Highly Educated Disabled Individuals In Romania," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 45-61, February.
    9. Haan, Peter & Myck, Michal, 2009. "Dynamics of health and labor market risks," Journal of Health Economics, Elsevier, vol. 28(6), pages 1116-1125, December.
    10. Bratsberg, Bernt & Fevang, Elisabeth & Røed, Knut, 2010. "Disability in the Welfare State: An Unemployment Problem in Disguise?," IZA Discussion Papers 4897, Institute of Labor Economics (IZA).
    11. Bratsberg, Bernt & Fevang, Elisabeth & Røed, Knut, 2013. "Job loss and disability insurance," Labour Economics, Elsevier, vol. 24(C), pages 137-150.
    12. Andreas Ravndal Kostol & Magne Mogstad, 2014. "How Financial Incentives Induce Disability Insurance Recipients to Return to Work," American Economic Review, American Economic Association, vol. 104(2), pages 624-655, February.
    13. Sigurd Mølster Galaasen, 2021. "Pension Reform Disabled," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(4), pages 1227-1260, October.
    14. Holen, Dag S., 2007. "It Ain't Necessariy So," Memorandum 19/2008, Oslo University, Department of Economics.
    15. Guðmundur Guðmundsson, 2000. "Prospects of Icelandic pension funds," Economics wp06, Department of Economics, Central bank of Iceland.
    16. Hanel, Barbara, 2012. "The effect of disability pension incentives on early retirement decisions," Labour Economics, Elsevier, vol. 19(4), pages 595-607.

    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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