Fundamentally Reforming the DI System: Evidence from German Notch Cohorts
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Series
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Speaker(s)Nicolas Ziebarth (ZEW – Leibniz Centre for European Economic Research, Germany)
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FieldEmpirical Microeconomics
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LocationTinbergen Institute Amsterdam, room 1.01
Amsterdam -
Date and time
February 27, 2024
15:30 - 16:30
Abstract
This paper studies a 2001 reform that abolished public occupational disability insurance (ODI) for German cohorts born after 1960. The first part shows a causal reduction in overall DI inflows by more than 30% in the long-run. The second part studies interaction effects with the private individual risk-rated ODI market. Representative data provide little evidence for significant overall increases in private ODI take-up. A general equilibrium model featuring the social safety net, asymmetric information and administrative costs explain weak private-public market interactions as well as stylized facts about take-up such as gradients by income and health. It also simulates policies.