Application and Award Responses to Stricter Screening in Disability Insurance

Abstract

We examine the targeting effects of stricter screening in the Dutch disability insurance (DI) program induced by a nationwide reform. The drastic “gatekeeper protocol” increased application costs and revealed more information about individuals’ ability to work. Discontinuity-in-time regressions on administrative data show substantial declines in DI application rates (40 percent in one year) following the reform, particularly among those with difficult-to-verify impairments and less severe health disorders. Individuals who were deterred from applying had worse health and worked less than never-applicants. Changes in average health conditions of awardees were almost fully driven by self-screening and work resumption during the DI sick-pay period.