Job Loss and Disability Insurance

By Bernt Bratsberg, Elisabeth Fevang, and Knut Røed

Published in:

Labour Economics, Vol. 24, 137–150.

Abstract

Based on administrative register data matched with firms’ financial statements and closure data collected from bankruptcy proceedings, we show that a large fraction of Norwegian disability insurance claims can be directly attributed to job displacement and other adverse shocks to em-ployment opportunities. For men, we estimate that job loss more than doubles the risk of perma-nent disability retirement and accounts for one quarter of new disability insurance claims. Firm profitability and tightness of the local labor market also significantly affect employees’ likelihood of disability program entry, and the adverse effects of displacement grow stronger when local labor market conditions deteriorate.

Full text (through Science Direct)

By Bratsberg, Bernt, Fevang, Elisabeth, and Røed, Knut
Published Sep. 19, 2013 2:10 PM - Last modified June 25, 2014 12:56 PM