"Disability insurance and the effects of return-to-work policies"

The rules governing disability insurance programs have changed considerably in the recent decades in most OECD countries with a remarkable shift towards policies aimed at re-integrating people experiencing a disability insurance episode into the labor market.

In her recent publication in the Review of Economic Dynamics, Chiara Dal Bianco from the Department of Economics and Management of the University of Padova, provides a quantitative assessment of the labor market and welfare effects of such return-to-work policies.

Among others, her findings highlight that a wage subsidy provided to disability insurance beneficiaries for the first year of work is promising, as it increases labor force participation by 4.6 percentage points and decreases the disability insurance rate by 5.7 percentage points without decreasing welfare.

 

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