Temporary Disability and Economic Incentives

23 Pages Posted: 11 Aug 2017

See all articles by Elisabeth Fevang

Elisabeth Fevang

University of Oslo - Ragnar Frisch Centre for Economic Research

Inés Hardoy

Institute for Social Research, Norway

Knut Roed

Ragnar Frisch Centre for Economic Research; IZA Institute of Labor Economics

Date Written: August 2017

Abstract

We investigate the impacts of economic incentives on the duration and outcome of temporary disability insurance (TDI) spells. The analysis is based on a large quasi‐experiment taking place in Norway, involving a complete overhaul of the TDI benefit system. Our findings show that the labour supply of TDI claimants does respond to both the benefit level and the level of local labour demand. The estimated elasticity of the transition rate to employment with respect to the benefit level is −0.33. We also find that the TDI benefit level significantly affects the transition rate to alternative social insurance programmes.

Suggested Citation

Fevang, Elisabeth and Hardoy, Inés and Røed, Knut, Temporary Disability and Economic Incentives (August 2017). The Economic Journal, Vol. 127, Issue 603, pp. 1410-1432, 2017. Available at SSRN: https://ssrn.com/abstract=3016858 or http://dx.doi.org/10.1111/ecoj.12345

Elisabeth Fevang (Contact Author)

University of Oslo - Ragnar Frisch Centre for Economic Research ( email )

Gaustadalleen 21
N-0317 Oslo
Norway

Inés Hardoy

Institute for Social Research, Norway ( email )

Munthesgate 31
0260 Oslo
Norway

Knut Røed

Ragnar Frisch Centre for Economic Research ( email )

Gaustadalleen 21
N-0349 Oslo
Norway

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
0
Abstract Views
84
PlumX Metrics