Do Firms with Low Disability Risks Opt Out from Public to Private Insurance?

Wolter H.J. Hassink, Pierre Koning*, Wim Zwinkels

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

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In the Netherlands, firms may opt out from public to private disability insurance (DI). Opponents of this "mixed market" for insurance argue that it may trigger a segmentation between firms with high risks with public insurance and low disability risks with private insurance. This article tests the importance of such risk segmentation, using administrative information on DI benefits and opting-out decisions of a panel of about 250,000 Dutch firms between 2007 and 2011. We find strong selection into private insurance of firms with low recent DI inflow rates and low current sickness rates. Accordingly, private insurers succeeded in attracting firms with low anticipated DI benefit costs in the first years to come. Our results also suggest that these effects are transitory - that is, firms that opted out have DI risks that are not structurally lower.

Original languageEnglish
Article number20170022
Pages (from-to)1-11
Number of pages11
JournalB.E. Journal of Economic Analysis and Policy
Issue number1
Early online date23 Jan 2018
Publication statusPublished - Jan 2018


  • health insurance
  • panel data models (C23)
  • public and private (I13)


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