Working Paper: NBER ID: w22206
Authors: Ren Bheim; Thomas Leoni
Abstract: We analyze different disability policy strategies using policy scores developed by the OECD for the period 1990 to 2007. Applying model-based and hierarchical agglomerative clustering, we investigate the existence of distinct country clusters, characterized by particular policy combinations. In spite of common trends in policy re-orientation, our results indicate that the reforms of the last two decades led to more, not less, heterogeneity between country groups in terms of sickness and disability policy. A set of Northern and Continental European countries emerges as a distinct cluster characterized by its particular combination of strong employment-oriented policies and comparatively high protection levels. A qualitative review of policy changes in the most recent years suggests that the gap between these countries and the rest might have further increased. We embed our empirical analysis in a theoretical framework to identify the objectives and the main components of a comprehensive disability policy strategy. The objectives of such a strategy can be subsumed under three headings, representing strategy pillars: prevention and treatment; protection and insurance; and activation and re-integration. Not all these dimensions are covered equally well by the OECD policy scores and will have to be further investigated.
Keywords: No keywords provided
JEL Codes: H55; I18; J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Reforms of the last two decades (E69) | Increased heterogeneity among country groups regarding sickness and disability policy (I14) |
| Distinct cluster of Northern and Continental European countries (O52) | Strong employment-oriented policies and relatively high protection levels (J08) |
| Increase in the number of clusters from 1990 to 2007 (C38) | Growing distinction between countries based on integration and compensation scores (O57) |
| Strengthened activation and labor market integration components (J08) | Divergence in policy approaches among countries (F68) |
| Gap between high reform profile countries and others (O57) | Increased since 2007 (F69) |