Scandinavian Working Papers in Economics

Working Paper Series, Center for Labor Studies,
Uppsala University, Department of Economics

No 2012:10: Early interventions and disability insurance: Experience from a field experiment

Per Engström (), Pathric Hägglund () and Per Johansson ()
Additional contact information
Per Engström: Uppsala Center for Labor Studies, Postal: Department of Economics, Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden
Pathric Hägglund: The Swedish Social Insurance Inspectorate, Postal: The Swedish Institute for Social Research
Per Johansson: Uppsala Center for Labor Studies, Postal: Department of Economics, Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden

Abstract: This paper estimates the effects of early interventions in the Swedish sickness insurance system. The aim of the interventions is to screen and, further to, rehabilitate sick listed individuals. We find that the early interventions – in contrast to what is expected – increase the inflow into disability benefits by around 20 percent. In order to explain the results, we develop a simple theoretical model based on asymmetric information of the health status. The model predicts that the treatment effect is larger for individuals with low incentives to return to work. In order to test this prediction we estimate effects for sick listed employed and unemployed separately. Consistent with the model’s prediction, we find that the effect is larger for the unemployed than for the employed.

Keywords: monitoring; screening; vocation rehabilitation; disability insurance; sickness insurances; unemployemnt insurance; randomized experiment

JEL-codes: C93; H51; H55; I18; J22

40 pages, April 18, 2012

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