Working Paper: NBER ID: w17138
Authors: Paul Bingley; Nabanita Datta Gupta; Peder J. Pedersen
Abstract: This paper investigates the interaction between measures of health, disability pension take up and labor market performance in Denmark by charting their development over time and by examining how they are affected by key policy reforms in the area of early retirement. The main emphasis is on the long-run development of the Social Disability Pension (SDP) program, and whether it concurs with trends in population health based on mortality indicators (both overall and cause-specific) and with self-reported health. A strong relationship is found between labor force activity measures and non-health related programs for early retirement for those 60 and older. However, no clear relationship is evident between SDP take up and the health indicators. One reason for the lack of a correlation is most probably that SDP is "on its own track" due to program innovations and reforms creating competing risks or program substitution especially for the 50+ population.
Keywords: disability pension; health; labor market; Denmark; early retirement
JEL Codes: H51; H55; I18; J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Labor force activity measures (J21) | Non-health-related programs for early retirement (aged 60 and older) (J26) |
| Trends in mortality or serious health conditions (I12) | Take-up of SDP (O39) |
| Economic cycles and health trends (E32) | Long-run development of SDP (O29) |
| Policy reforms (E69) | SDP take-up (J79) |
| SDP program's unique trajectory (J68) | Lack of correlation between SDP take-up and health indicators (I14) |