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Award errors and permanent disability benefits in Spain

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Abstract
There is a controversial debate about the effects of permanent disability benefits on labor market behavior. In this paper we estimate equations for deserving and receiving disability benefits to evaluate the award error as the difference in the probability of receiving and deserving using survey data from Spain. Our results indicate that individuals aged between 55 and 59, self-employers or working in an agricultural sector have a probability of receiving a benefit without deserving it significantly higher than the rest of individuals. We also find evidence of gender discrimination since male have a significantly higher probability of receiving a benefit without deserving it. This seems to confirm that disability benefits are being used as an instrument for exiting the labor market for some individuals approaching the early retirement or those who do not have right to retire early. Taking into account that awarding process depends on Social Security Provincial Department, this means that some departments are applying loosely the disability requirements for granting disability benefits.

Suggested Citation

  • Sergi Jiménez-Martín & José M. Labeaga & Cristina Vilaplana Prieto, 2006. "Award errors and permanent disability benefits in Spain," Economics Working Papers 966, Department of Economics and Business, Universitat Pompeu Fabra.
    • Handle: RePEc:upf:upfgen:966
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    Citations

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    Cited by:

    1. Vall Castello, Judit, 2012. "Promoting employment of disabled women in Spain; Evaluating a policy," Labour Economics, Elsevier, vol. 19(1), pages 82-91.
    2. Pilar García-Gómez & Sergi Jiménez-Martín & Judit Vall Castelló, 2012. "Health, Disability, and Pathways into Retirement in Spain," NBER Chapters, in: Social Security Programs and Retirement around the World: Historical Trends in Mortality and Health, Employment, and Disability Insurance Participatio, pages 127-174, National Bureau of Economic Research, Inc.
    3. Sergi Jiménez-Martín & Arnau Juanmarti Mestres & Judit Vall Castelló, 2019. "Great Recession and disability insurance in Spain," Empirical Economics, Springer, vol. 56(5), pages 1623-1645, May.
    4. Sergi Jiménez-Martín & Arnau Juanmarti Mestres & Judit Vall-Castello, 2016. "Great Recession and Disability in Spain," Working Papers 896, Barcelona School of Economics.
    5. Hugo Benítez-Silva & Richard Disney & Sergi Jiménez-Martín, 2010. "Disability, capacity for work and the business cycle: an international perspective [Has the boom in incapacity benefit claimant numbers passed its peak?]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 25(63), pages 483-536.
    6. Sergi Jiménez‐Martín & José M. Labeaga & Cristina Vilaplana Prieto, 2006. "A sequential model of older workers' labor force transitions after a health shock," Health Economics, John Wiley & Sons, Ltd., vol. 15(9), pages 1033-1054, September.
    7. Solé, Meritxell & Díaz Serrano, Lluís & Rodríguez, Marisol, 2010. "Work, risk and health: differences between immigrants and natives in Spain," Working Papers 2072/151548, Universitat Rovira i Virgili, Department of Economics.
    8. Guillem López i Casasnovas & Catia Nicodemo, 2012. "Transition probabilities and duration analysis among disability states: Some evidence from Spanish data," Economics Working Papers 1327, Department of Economics and Business, Universitat Pompeu Fabra.
    9. Gannon, Brenda, 2006. "Disability Benefit - Controlled or Under-Controlled?," Papers BP2007/1, Economic and Social Research Institute (ESRI).
    10. repec:esr:chaptr:jacb200665 is not listed on IDEAS
    11. Solé, Meritxell & Diaz-Serrano, Luis & Rodriguez Martinez, Marisol, 2010. "Work, Risk and Health: Differences between Immigrants and Natives in Spain," IZA Discussion Papers 5338, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Disability benefits; Award error; Early retirement; Social security;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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