Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2015-07-07
Number: 15-081/V
Author-Name: Wolter H.J. Hassink
Author-Workplace-Name: Utrecht University School of Economics, the Netherlands
Author-Name: Pierre Koning
Author-Workplace-Name: VU University Amsterdam, the Netherlands
Author-Name: Wim Zwinkels
Author-Workplace-Name: VU University Amsterdam, the Netherlands
Title: Employers Opting Out of Public Disability Insurance: Selection or Incentive Effects?
Abstract: This paper analyzes selection and incentive effects of opting out from public to private insurance on employer Disability Insurance (DI) inflow rates. We use administrative information on DI benefit costs and opting-out decisions of a balanced panel of about 140,000 employers that are observed between 2007 and 2011. We argue that the opting-out decision of employers was driven by current DI enrolment and anticipation effects that resulted from short-term expectations on DI costs. In particular, employers opted out when this was most rewarding for them in reducing DI premium rates. When controlling for these effects, our main finding is that there are no incentive effects due to opting out. Thus, publicly and privately insured employers show similar DI inflow rates.
Classification-JEL: C23, I13
Keywords: Public versus private insurance, Disability insurance, Opting out, Longitudinal analyses
File-Url: https://papers.tinbergen.nl/15081.pdf
File-Format: application/pdf
File-Size: 393430 bytes
Handle: RePEc:tin:wpaper:20150081