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First Exits from the Swedish Labor Market Due to Disability

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Abstract

Nowadays, with an increasingly aging population, an increasing proportion of the population on disability benefits, and an implicitly lower level of economic output and foregone tax revenue, disability has become a major public policy issue in many countries. Estimating both single risk and competing risks models on a Swedish longitudinal database, this study analyzes the risk of exit from the labor market due to disability at a certain age, conditional on having remained in the labor force until that age. The explanatory variables did not have identical coefficients across destination types. For example, the estimated single risk model shows that a higher level of education decreased the hazard of exiting the labor market with a disability pension, while the estimated competing risks model suggests that a higher level of education increased the hazard of exiting with a partial disability pension, but it decreased the hazard of exiting with a full disability pension.

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Notes

  1. There have been few studies on disability exits from the labor market in Sweden (e.g., Berglind 1977; Hedström 1980; Hansson-Brusewitz 1992; Månsson et al. 1994, 1996; Wadensjö and Palmer 1996; Palme and Svensson 1997). Summarizing their findings, it seems that there were three groups of independent variables that influenced the exit into disability: demographic variables, labor market variables, and health variables.

  2. In November 2005, 1 EURO ≈ 9,5 Kronor and 1 USD ≈ 8 kronor.

  3. Since January 2003, the terms disability pension and temporary disability pension were replaced by activity compensation for people between the ages of 19–29 and sickness compensation for those aged between 30–64.

  4. See Andrén (2001) for a detailed description of these models.

  5. The head office of The Swedish Social Insurance Agency (since January 2005).

  6. See Andrén (2001) for a detailed description of the LS-database.

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Correspondence to Daniela Andrén.

Appendix

Appendix

A1 The definition of disability
Table A1 Sample means for basic variables,* by type of exit, IP and LSIP samples

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Andrén, D. First Exits from the Swedish Labor Market Due to Disability. Popul Res Policy Rev 27, 227–238 (2008). https://doi.org/10.1007/s11113-007-9061-6

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