Purpose During 2009‒2013 a pilot project was carried out in Zurich which aimed to increase the income of disability insurance (DI) benefit recipients in order to reduce their entitlement to DI benefits. The project consisted of placement coaching carried out by a private company that specialized in this field. It was exceptional with respect to three aspects: firstly, it did not include any formal training and/or medical aid; secondly, the coaches did not have the possibility of providing additional financial incentives or sanctioning lack of effort; and thirdly due to performance bonuses, the company not only had incentives to bring the participants into (higher paid) work, but also to keep them there for 52 weeks. This paper estimates the medium-run effects of the pilot project and assesses the net benefit from the Swiss social security system. Methods Different propensity score matching estimators are applied to administrative longitudinal data in order to construct suitable control groups. Results The estimates indicate a reduction in DI benefits and an increase in income even in the medium-run. A simple cost–benefit analysis suggests that the pilot project was a profitable investment for the social security system. Conclusion Given a healthy labor market, it seems possible to enhance the employment prospects of disabled persons with a relatively inexpensive intervention, which does not include any explicit investments in human capital.
This is a preview of subscription content, access via your institution.
Buy single article
Instant access to the full article PDF.
Price excludes VAT (USA)
Tax calculation will be finalised during checkout.
This section is based on http://www.zas.admin.ch/org/00858/00861/index.html?lang=en.
CHF = Swiss Franc, currency and legal tender of Switzerland.
Here “psmatch2” implemented in STATA by Leuven and Sianesi  is applied. STATA is the statistical software created by StataCorp LLC, 4905 Lakeway Drive, College Station, Texas 77845-4512, USA.
Huber et al.  implement this estimator in STATA with the command “radiusmatch”.
Average annual unemployment rates: 3.7% in 2009, 3.6% in 2010, 2.9% in 2011, 3.0% in 2012, 3.2% in 2013, 3.3% in 2014. Source: own calculation based on http://www.amstat.ch.
Although this may seem odd at first glance, using the same person as a control for many times is a common practice, for example, in nearest neighbor matching with replacement. Also a pooled panel regression can be interpreted as using untreated individuals several times as controls.
For example, the median propensity score (linear index) of the untreated individuals is − 2.77 in 2009 and − 1.88 in 2010.
This relative increase of 37% can be roughly calculated as follows: from the graph in the bottom-left of Fig. 3 it can be seen that the counterfactual income is approximately CHF 7500. CHF 2750/CHF 7500 is approximately 37%
Exchange rates at 16-March-2016.
This number is the sum of the contribution rates of the AHV (8.4%), IV (1.4%), EO (0.5%), and the ALV (2.2%). Source: Federal Social Insurance Office (FISO), Switzerland
Exchange rates at 16-March-2016.
Burkhauser RV, Daly MC, McVicar D, Wilkins R. Disability benefit growth and disability reform in the US: lessons from other OECD nations. IZA J Labor Policy. 2014;3(1):1–30.
Organisation for Economic Co-operation and Development. Sickness, disability and work: breaking the barriers, a synthesis of findings across OECD countries. Paris: OECD Publishing; 2010.
Bound J, Burkhauser RV. Economic analysis of transfer programs targeted on people with disabilities. Handb Labor Econ. 1999;3(3):3417–3528.
Wittenburg D, Mann DR, Thompkins A. The disability system and programs to promote employment for people with disabilities. IZA J Labor Policy. 2013;2(1):4.
Maestas N, Mullen KJ, Strand A. Does disability insurance receipt discourage work? Using examiner assignment to estimate causal effects of SSDI receipt. Am Econ Rev. 2013;103(5):1797–1829.
Bütler M, Deuchert E, Lechner M, Staubli S, Thiemann P. Financial work incentives for disability benefit recipients: lessons from a randomised field experiment. IZA J Labor Policy. 2015;4(1):1–18.
Delin BS, Hartman EC, Sell CW. Given time it worked: positive outcomes from a ssdi benefit offset pilot after the initial evaluation period. J Disabil Policy Stud. 2015;26(1):54–64.
Weathers RR, Hemmeter J. The impact of changing financial work incentives on the earnings of Social Security Disability Insurance (SSDI) beneficiaries. J Policy Anal Manag. 2011;30(4):708–728.
Frölich M, Heshmati A, Lechner M. A microeconometric evaluation of rehabilitation of long-term sickness in Sweden. J Appl Econ. 2004;19(3):375–396.
Heshmati A, Engström LG. Estimating the effects of vocational rehabilitation programs in Sweden. In: Lechner M, Pfeiffer F, editors. Econometric evaluation of labour market policies. ZEW economics studies 13. New York: Physica-Verlag; 2001. pp 183–210.
Campolieti M, Gunderson MK, Smith JA. The effect of vocational rehabilitation on the employment outcomes of disability insurance beneficiaries: new evidence from Canada. IZA J Labor Policy. 2014;3(1):1–29.
Aakvik A, Heckman JJ, Vytlacil EJ. Estimating treatment effects for discrete outcomes when responses to treatment vary: an application to Norwegian vocational rehabilitation programs. J Econ. 2005;125(1):15–51.
Dean D, Pepper J, Schmidt R, Stern S. The effects of vocational rehabilitation for people with cognitive impairments. Int Econ Rev. 2015;56(2):399–426.
Markussen S, Røed K. The impacts of vocational rehabilitation. Labour Econ. 2014;31(1):1–13.
Brown AJ, Koettl J. Active labor market programs-employment gain or fiscal drain? IZA J Labor Econ. 2015;4(1):1–36.
Card D, Kluve J, Weber A. Active labour market policy evaluations: a meta-analysis. Econ J. 2010;120(548):F452–F477.
Thomsen S. Job search assistance programs in Europe: evaluation methods and recent empirical findings. FEMM Working Paper No. 18. Magdeburg: Otto-von-Guericke University; 2009.
Wunsch C. How to minimize lock-in effects of programs for unemployed workers. IZA World Labor. 2016. https://doi.org/10.15185/izawol.288.
Høgelund J, Holm A. Case management interviews and the return to work of disabled employees. J Health Econ. 2006;25(3):500–519.
LaLonde RJ. Evaluating the econometric evaluations of training programs with experimental data. Am Econ Rev. 1986;76(4):604–620.
Dehejia RH, Wahba S. Causal effects in nonexperimental studies: reevaluating the evaluation of training programs. J Am Stat Assoc. 1999;94(448):1053–1062.
Smith J, Todd P. Does matching overcome LaLonde’s critique of nonexperimental estimators? J Econ. 2005;125(1–2):305–353.
Fredriksson P, Johansson P. Dynamic treatment assignment: the consequences for evaluations using observational data. J Bus Econ Stat. 2008;26(4):435–445.
Sianesi B. An evaluation of the Swedish system of active labor market programs in the 1990. Rev Econ Stat. 2004;86(1):133–155.
Sianesi B. Differential effects of active labour market programs for the unemployed. Labour Econ. 2008;15(3):370–399.
Biewen M, Fitzenberger B, Osikominu A, Waller M. The effectiveness of public sponsored training revisited: the importance of data and methodological choices. J Labor Econ. 2014;32(4):837–897.
Leuven E, Sianesi B. PSMATCH2: Stata module to perform full Mahalanobis and propensity score matching, common support graphing, and covariate imbalance testing. 2003. This version 4.0.11. http://ideas.repec.org/c/boc/bocode/s432001.html.
Imbens GW. Matching methods in practice: three examples. J Hum Resour. 2015;50(2):373–419.
Galdo JC, Smith J, Black D. Bandwidth selection and the estimation of treatment effects with unbalanced data. Ann Econ Stat. 2008;91–92:189–216.
Silverman BW. Density estimation for statistics and data analysis. London: Chapman & Hall; 1986.
Lechner M, Miquel R, Wunsch C. Long-run effects of public sector sponsored training in West Germany. J Eur Econ Assoc. 2011;9(4):742–784.
Huber M, Lechner M, Steinmayr A. Radius matching on the propensity score with bias adjustment: tuning parameters and finite sample behavior. Empir Econ. 2015;49(1):1–31.
Caliendo M, Mahlstedt R, Mitnik O. Unobservable, but unimportant? The influence of personality traits (and other usually unobserved variables) for the evaluation of labor market policies. IZA Discussion Paper No. 8337; 2014.
Lechner M, Wunsch C. Sensitivity of matching-based program evaluations to the availability of control variables. Labour Econ. 2013;21(1):111–121.
Heckman JJ, Smith JA. The pre-programme earnings dip and the determinants of participation in a social programme. Implications for simple programme evaluation strategies. Econ J. 1999;109(457):313–348.
Heckman JJ, LaLonde RJ, Smith JA. The economics and econometrics of active labor market programs. Handb Labor Econ. 1999;3(1):1865–2097.
Dehejia R. Practical propensity score matching: a reply to Smith and Todd. J Econ. 2005;125(1):355–364.
Austin PC. An introduction to propensity score methods for reducing the effects of confounding in observational studies. Multivar Behav Res. 2011;46(3):399–424.
Millimet DL, Tchernis R. On the specification of propensity scores, with applications to the analysis of trade policies. J Bus Econ Stat. 2009;27(3):397–415.
Ashenfelter O. Estimating the effect of training programs on earnings. Rev Econ Stat. 1978;60(1):47–57.
Lechner M. A Note on the common support problem in applied evaluation studies. Ann Econ Stat. 2008;91–92:217–235.
Lee WS. Propensity score matching and variations on the balancing test. Empir Econ. 2013;44(1):47–80.
Rosenbaum PR, Rubin DB. Constructing a control group using multivariate matched sampling methods that incorporate the propensity score. Am Stat. 1985;39(1):33–38.
Rubin DB. Using propensity scores to help design observational studies: application to the tobacco litigation. Health Serv Outcomes Res Methodol. 2001;2(3–4):169–188.
World Bank. World development indicators. 2015. https://data.worldbank.org. Accessed 09 Feb 2016.
Baldwin R, Teulings C. Secular stagnation: facts, causes and cures. London: Centre for Economic Policy Research-CEPR; 2014.
The author would like to thank the anonymous reviewers for their helpful and constructive comments that greatly contributed to improving the final version of the paper.
This paper is based on the project “Evaluation Pilotprojekt Ingeus—berufliche Wiederein-gliederung von Rentenbeziehenden der Invalidenversicherung” funded by the Federal Social Insurance Office (FISO), Switzerland. It does not necessarily reflect the opinions and views held by the FISO.
Conflict of interest
Author Tobias Hagen declares that he has no conflict of interest.
All procedures performed in studies involving human participants were in accordance with the ethical standards of the institutional and/or national research committee and with the 1964 Helsinki declaration and its later amendments or comparable ethical standards.
Electronic supplementary material
Below is the link to the electronic supplementary material.
See Fig. 5.
Rights and permissions
About this article
Cite this article
Hagen, T. Evaluation of a Placement Coaching Program for Recipients of Disability Insurance Benefits in Switzerland. J Occup Rehabil 29, 72–90 (2019). https://doi.org/10.1007/s10926-018-9766-x
- Health economics