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Work Resumption after a Fixed-Term Disability Pension: Changes over Time during a Period of Decreasing Incidence of Disability Retirement

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  • Mikko Laaksonen

    (Finnish Centre for Pensions (ETK), Eläketurvakeskus, 00065 Helsinki, Finland)

Abstract

The incidence of disability retirement in Finland has sharply decreased over the last ten years. At the same time, the share of fixed-term pensions has increased to cover more than half of all new disability pensions. This study examined the efficiency of fixed-term disability pensions under these changing circumstances with the aim of addressing the following research questions: are fixed-term disability pensions more often converted to permanent pensions, and how have the changes affected return to work? The study was based on register data of Finnish residents aged 25–62 whose fixed-term disability pension started in 2006 ( n = 10,177) or 2015 ( n = 7918). Of the fixed-term disability pensions starting in 2006, 58 percent were converted to a permanent disability pension within the next four years. In 2015, the corresponding figure was 41 percent. Return to work increased from 24 to 30 percent. In addition, ending up in some other state (most often unemployment) increased, and, more often, fixed-term disability pensions continued for more than four years. Transferring to a permanent disability pension decreased more among the younger, those with a lower education, and those suffering from mental disorders. The results were not notably affected by changes in the characteristics of fixed-term disability pension recipients (e.g., demographic and occupational characteristics and rehabilitation) or the selection of applicants into a fixed-term or a permanent pension. Return to work increased more among men, the older age groups, those with a fixed-term disability pension due to somatic diseases, and those who had received vocational rehabilitation. Adjusting for the composition of fixed-term disability pensioners increased the differences between the study years, and controlling for the selection into a fixed-term pension further widened the differences. In conclusion, a decreasing proportion of fixed-term disability pensions are converted to permanent pensions, but this is only partly reflected in increased return to work. Further efforts are needed to support work resumption after a fixed-term disability pension to avoid the situation where people drop out from disability pension but are resting on unemployment and other benefits.

Suggested Citation

  • Mikko Laaksonen, 2021. "Work Resumption after a Fixed-Term Disability Pension: Changes over Time during a Period of Decreasing Incidence of Disability Retirement," IJERPH, MDPI, vol. 18(9), pages 1-13, April.
  • Handle: RePEc:gam:jijerp:v:18:y:2021:i:9:p:4618-:d:544097
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    References listed on IDEAS

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    1. Philip McHale & Andy Pennington & Cameron Mustard & Quenby Mahood & Ingelise Andersen & Natasja Koitzsch Jensen & Bo Burström & Karsten Thielen & Lisa Harber-Aschan & Ashley McAllister & Margaret Whit, 2020. "What is the effect of changing eligibility criteria for disability benefits on employment? A systematic review and meta-analysis of evidence from OECD countries," PLOS ONE, Public Library of Science, vol. 15(12), pages 1-19, December.
    2. Fraser W Gaspar & Catherine S Zaidel & Carolyn S Dewa, 2018. "Rates and predictors of recurrent work disability due to common mental health disorders in the United States," PLOS ONE, Public Library of Science, vol. 13(10), pages 1-14, October.
    3. Sonia Lippke & Natalie Schüz & Elisabeth Zschucke, 2019. "Temporary Disability Pension, RTW-Intentions, and RTW-Behavior: Expectations and Experiences of Disability Pensioners over 17 Months," IJERPH, MDPI, vol. 17(1), pages 1-15, December.
    4. Svetlana Solovieva & Taina Leinonen & Kirsti Husgafvel-Pursiainen & Antti Kauhanen & Pekka Vanhala & Rita Asplund & Eira Viikari-Juntura, 2019. "Controlling for Structural Changes in the Workforce Influenced Occupational Class Differences in Disability Retirement Trends," IJERPH, MDPI, vol. 16(9), pages 1-15, April.
    5. Anton Nivorozhkin, 2019. "Overcoming barriers: Effects of entering vocational rehabilitation on labour market outcomes," International Journal of Social Welfare, John Wiley & Sons, vol. 28(3), pages 260-270, July.
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    Cited by:

    1. Jenni Blomgren & Mikko Laaksonen & Riku Perhoniemi, 2021. "Changes in Unemployment Affect Sickness Absence and Disability Retirement Rates: A Municipality-Level Panel Study," IJERPH, MDPI, vol. 18(12), pages 1-14, June.
    2. Álvaro Morera & Joaquín Calatayud & Rubén López-Bueno & José Casaña & Jonas Vinstrup & Rúni Bláfoss & Thomas Clausen & Lars Louis Andersen, 2022. "Can a Healthy Lifestyle Prevent Disability Pension among Female Healthcare Workers with Good and Poor Self-Rated Health? Prospective Cohort Study with 11-Year Register Follow-Up," IJERPH, MDPI, vol. 19(17), pages 1-9, August.

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