NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

Health, Disability Insurance, and Retirement in Denmark

Paul Bingley, Nabanita Datta Gupta, Michael Jørgensen, Peder J. Pedersen

Chapter in NBER book Social Security Programs and Retirement Around the World: Disability Insurance Programs and Retirement (2016), David A. Wise, editor (p. 331 - 368)
Conference held September 26-28, 2013
Published in January 2016 by University of Chicago Press
© 2016 by the National Bureau of Economic Research
in NBER Book Series - International Social Security

There are large differences in labor force participation rates by health status. We examine to what extent these differences are determined by the provisions of Disability Insurance and other pension programs. Using administrative data for Denmark we find that those in worse health and with less schooling are more likely to receive DI. The gradient of DI participation across health quintiles is almost twice as steep as for schooling - moving from having no high school diploma to college completion. Using an option value model that accounts for different pathways to retirement, applied to a period spanning a major pension reform, we find that pension program incentives in general are important determinants of retirement age. Individuals in poor health and with low schooling are significantly more responsive to economic incentives than those who are in better health and with more schooling. Similar gradients in outcomes and behavior by health and schooling partially reflects the less educated having poorer health on average, but also that the less educated have worse job prospects and higher replacement rates due to a progressive formula for DI and other pension benefits.

download in pdf format
   (1974 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): https://doi.org/10.7208/chicago/9780226262604.003.0008

This chapter first appeared as NBER working paper w20114, Health, Disability Insurance and Retirement in Denmark, Paul Bingley, Nabanita Datta Gupta, Michael Jorgensen, Peder Pedersen
Users who downloaded this chapter also downloaded* these:
Bingley, Gupta, and Pedersen The Impact of Incentives on Retirement in Denmark
Coile, Milligan, and Wise Introduction to "Social Security Programs and Retirement Around the World: Disability Insurance Programs and Retirement"
Bingley, Gupta, Jorgensen, and Pedersen w20114 Health, Disability Insurance and Retirement in Denmark
Coile Disability Insurance Incentives and the Retirement Decision: Evidence from the United States
García-Gómez, Jimenez-Martin, and Vall Castelló Financial Incentives, Health, and Retirement in Spain
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us