Summary
This paper examines the effects of experience rating on the inflow into disability insurance (DI) in the Netherlands, using unique longitudinal administrative data from the social benefit administration. We follow a difference-in-differences approach to identify the impact of changes in DI premiums. Due to unawareness of the experience rating system, employers seem to have been triggered to increase preventative activities, once they have experienced increases in DI premium rates. We find this impact to be substantial, amounting to a 15% reduction of the DI inflow.
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UWV is gratefully acknowledged for giving access to the data and providing facilities that were needed to carry out research activities. The suggestions and comments of Rob Alessie, Wolter Hassink, Maarten Lindeboom, Richard Nahuis, Peter Rijnsburger and David Wittenburg, as well as two anonymous referees have improved the paper substantially.
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Koning, P. Experience Rating and the Inflow into Disability Insurance. De Economist 157, 315–335 (2009). https://doi.org/10.1007/s10645-009-9125-6
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DOI: https://doi.org/10.1007/s10645-009-9125-6