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Does a Boom in the Local Labor Market Reduce Disability Pensioning Up-Take?

40 Pages Posted: 30 Sep 2016  

Henning Finseraas

Norwegian Social Research

Pål Schøne

Institute for Social Research, Norway

Date Written: September 29, 2016

Abstract

Previous research on the relationship between shocks in the local labor market and disability pensioning has shown that negative shocks, such as plant closures, have led to increases in disability up-takes. One interpretation of these findings is that there is a pool of workers for which disability pension is possible, but only utilized if the local labor market is difficult. In this paper we exploit the development of the Snow White gas field — which led to a boom in the local labor market in the Norwegian county of Hammerfest — to examine the impact of a positive local labor market shock. Employment and wages increased in Hammerfest during the development period and disability pensioning decreased at the end of the period. The effects on employment and disability pensioning are however purely driven by people moving to Hammerfest in response to the shock.

Keywords: Labor demand shock, local labor markets, disability pension

JEL Classification: I3, J2, J61, J62

Suggested Citation

Finseraas, Henning and Schøne, Pål, Does a Boom in the Local Labor Market Reduce Disability Pensioning Up-Take? (September 29, 2016). Available at SSRN: https://ssrn.com/abstract=2845326 or http://dx.doi.org/10.2139/ssrn.2845326

Henning Finseraas

Norwegian Social Research ( email )

Munthesgt. 29, N-0260
Oslo
Norway

Pål Schøne (Contact Author)

Institute for Social Research, Norway ( email )

Munthesgate 31
0260 Oslo
Norway

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