Paper #1519

Título:

Great Recession and disability insurance in Spain

Autores:

Sergi Jiménez-Martín, Arnau Juanmarti Mestres y Judit Vall Castelló

Fecha:

Octubre 2016

Resumen:

In this paper, we exploit the strong incidence of the Great Recession in Spain to estimate the effect of economic conditions on participation in Disability Insurance (DI). Using individual panel data, we show that increases in the local unemployment rate are associated with a reduction in the individual probability to enter the DI program during the Great Recession in Spain. Using aggregate data on applications, we show that this procyclical behavior of DI awards comes from an increase in the proportion of applications that are denied. Thus, contrary to the previous literature that has extensively reported a countercyclical behavior of DI participation, our results provide new evidence that, in periods of extremely recessionary conditions, DI participation may turn procyclical.

Palabras clave:

Disability, Great Recession, labour market transitions

Códigos JEL:

H55, I10, J14.

Área de investigación:

Economía Laboral, Pública, de Desarrollo y de la Salud / Estadística, Econometría y Métodos Cuantitativos

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