Employee Health and Employer Incentives

Tinbergen Institute Discussion Paper 15-109/V

38 Pages Posted: 14 Sep 2015

See all articles by Patrick Hullegie

Patrick Hullegie

VU University Amsterdam; VU University Amsterdam - Department of Economics

Pierre Koning

Vrije Universiteit Amsterdam, School of Business and Economics

Multiple version iconThere are 2 versions of this paper

Date Written: August 31, 2015

Abstract

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 helped or hindered employment opportunities of workers with health problems or disability. An important component of the Dutch reforms was to enhance employer incentives, which was done by making them responsible for paying sickness benefits and by strengthening their sickness monitoring obligations. These employer incentives may stimulate preventive and reintegration activities by firms, thereby improving the employment opportunities of disabled workers. However, the reforms also impose substantial costs on employers when an employee gets sick and may therefore reduce employment opportunities of disabled workers. We use data from the Dutch Labor Force Survey and rich administrative data from hospital admission records, social security records, and the municipality registers containing demographic information to examine whether the disability reforms have in fact improved the economic situation for the disabled. On balance, we conclude that the DI reforms implemented by the Dutch government have mainly protected those who already have a job, and may have inadvertently reduced the hiring opportunities of people with a disability.

Keywords: Disability Insurance, employer incentives, policy evaluation

JEL Classification: H53, J14, J18

Suggested Citation

Hullegie, Patrick and Hullegie, Patrick and Koning, Pierre, Employee Health and Employer Incentives (August 31, 2015). Tinbergen Institute Discussion Paper 15-109/V, Available at SSRN: https://ssrn.com/abstract=2660080 or http://dx.doi.org/10.2139/ssrn.2660080

Patrick Hullegie (Contact Author)

VU University Amsterdam

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV
Netherlands

VU University Amsterdam - Department of Economics ( email )

De Boelelaan 1105
1081 HV Amsterdam
Netherlands

Pierre Koning

Vrije Universiteit Amsterdam, School of Business and Economics ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

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