Working Paper: NBER ID: w30812
Authors: Bjoern Fischer; Johannes Micha Geyer; Nicolas R. Ziebarth
Abstract: This paper studies a 2001 reform that abolished public occupational disability insurance (ODI) for German cohorts born after 1960. The first part shows a causal reduction in overall DI inflows by more than 30% in the long-run. The second part studies interaction effects with the private individual risk-rated ODI market. Representative data provide little evidence for significant overall increases in private ODI take-up. A general equilibrium model featuring the social safety net, asymmetric information and administrative costs explain weak private-public market interactions as well as stylized facts about take-up such as gradients by income and health. It also simulates policies.
Keywords: disability insurance; public insurance; private insurance; Germany; social safety net
JEL Codes: H53; H55; I10; I14; I18; J14; J21; J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| 2001 reform of the German public disability insurance (DI) system (H55) | private occupational disability insurance (ODI) market uptake (G52) |
| low take-up rates (J68) | private occupational disability insurance (ODI) market uptake (G52) |
| high lifecycle work disability risks (J28) | low take-up rates (J68) |
| strong income and health gradients in private ODI take-up (I14) | low take-up rates (J68) |
| inverse relationship of income and health gradients in work disability risk (I14) | low take-up rates (J68) |
| administrative costs and asymmetric information (D82) | low take-up rates (J68) |
| 2001 reform of the German public disability insurance (DI) system (H55) | inflow of new DI beneficiaries (J65) |
| 2001 reform of the German public disability insurance (DI) system (H55) | inflow of new DI beneficiaries among males (J68) |
| 2001 reform of the German public disability insurance (DI) system (H55) | inflow of new DI beneficiaries among females (J21) |