Hidden unemployment in disability insurance

Pierre Koning, Daniel van Vuuren*

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

We estimate the fraction of hidden unemployment in the disability insurance (DI) inflow rate on the basis of a longitudinal administrative data set of Dutch employers for the period 1994-2003. This fraction can be identified by imposing so-called exclusion restrictions on variables that are thought to impact the layoff rate but not disability risk. We find that the fraction of hidden unemployment in DI inflow amounts to 11 per cent. This implies that 2.6 per cent of all layoffs took place via the DI scheme. In addition, we find that this share has declined substantially over time, suggesting that various policy measures taken have been effective.

Original languageEnglish
Pages (from-to)611-636
Number of pages26
JournalLabour
Volume21
Issue number4-5
DOIs
Publication statusPublished - Dec 2007
Externally publishedYes

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