MSCA Grant- Disability, Labour and Health

 

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In 2020 I began an ambitious project under the support of a Marie Sklodowska Curie action (MSCA) grant from the European Horizon 2020 program. The action allowed me to conduct research on health related disabilities- its causes, consequences, and more importantly the role of social policies and benefits on long term wellbeing.

Specifically, I received funding from the European Union’s Horizon 2020 research and innovation programme under the Marie Sklodowska-Curie grant agreement No 840591

Motivation

During recent decades developed countries across the world have confronted significant financial challenges. One area that has come under increasing pressure is the provision of disability benefits to those unable to work full time. Even though there are large differences across countries, the share of working age individuals over the age of 60 who receive disability benefits is greater than 10% in most developed countries in 2010, expenditures on disability programs exceeded 30% of total expenditure on pensions, and surpassed 5% of GDP in several countries. One intuitive cause for this is population ageing, however there is evidence that the number of young individuals with work impeding disabilities is also increasing , thus emphasizing the societal relevance of these programs. Financial pressure is not the only concern. Different studies have shown that disability programs have become substitutes for unemployment benefits or early retirement since they create financial incentives for individuals to withdraw from the labor force prematurely.

In response, many governments have implemented reforms to curb the number of beneficiaries and expenditures on disability programs. This has been done by either tightening eligibility conditions to the different programs, or reducing the benefit amounts. One model for such policies in Europe is the Netherlands, which until the early 2000s was burdened by a substantially larger share of disability recipients than its European counterparts. A series of reforms implemented from 2004 onward sought to reduce government expenditures on disability benefits. The exemplary nature of the Dutch reforms provides an invaluable opportunity to better understand the impact of reducing benefit eligibility on a diverse set of policy relevant outcomes. In the first instance, this proposal will evaluate the causal relationship between disability benefits and labor force participation at the individual level. This will elucidate whether current trends are a direct consequence of the reforms or whether country level statistics are biased by other underlying trends or policies. While such reforms may have succeeded in reducing the number of benefit recipients, this proposal will also seek to evaluate in second instance whether tightening of benefit eligibility has an impact on individual level health. This is of great importance since protecting an individual’s health is a fundamental, yet often forgotten, explicit aim of these programs. The potential shift of financial burden from the social protection to the health system may in the end not be a desirable outcome from a societal perspective.

This project explores the role of disability programs in the Netherlands and disability in a worldwide context to understand how different programs, prevention strategies, or particular causes can be of greater relevance. This includes working formally on administrative records from the Netherlands but also exploiting studies and settings in other contexts.

Key messages from my research

  • Financial incentives in combination with social networks and structures can contribute to reduce the prevalence of risk factors that are amongst the main causes of applying for disability benefits.
  • Mental health- the fastest growing cause of disabilty- is not appropriately addressed by the health care services and specifically low income individuals are less likely to recover and fall into disability.
  • The appropriate provision of health care treatments can reduce disabilities in the long term and lead to similar life trajectories as those who were healthy.
  • Applications for disablity benefits rely on human evaluation which can lead to large variations particularly for low income people.
  • Receiving disability benefits can indeed lower labour force participation... and earnings. Thankfully benefits compensate.

Publications, working papers, and presentations

Publications

Riumallo Herl, Carlos, Chodziwadziwa Kabudula, Kathleen Kahn, Stephen Tollman, and David Canning. "Pension exposure and health: Evidence from a longitudinal study in South Africa." The Journal of the Economics of Ageing 23 (2022): 100411.

Payne, Collin F., Brian Houle, Chido Chinogurei, Carlos Riumallo Herl, Chodziwadziwa Whiteson Kabudula, Lindsay C. Kobayashi, Joshua A. Salomon, and Jennifer Manne-Goehler. "Differences in healthy longevity by HIV status and viral load among older South African adults: an observational cohort modelling study." The Lancet HIV 9, no. 10 (2022): e709-e716

Working papers

Lagarde M., and Riumallo Herl C. “Stronger together? Group incentives and the demand for prevention”

Garcia-Gomez P., Koning P., O’Donnell O., and Riumallo Herl C. “Selective exercise of discretion in disability insurance awards”

Lagarde M., and Riumallo Herl C. “Can risk-targetting improve the efficiency of incentives for preventive care? Experimental evidence from El Salvador”

Riumallo Herl C., Oude Hengel K., Van Ourti T., Burdof A. “Disability at youth: How do disability benefit impact employment and income in early adulthood”

Francisca Vargas Lopes, Bastian Ravesteijn , Tom Van Ourti , Carlos Riumallo Herl. "Income Disparities in Four Stages of Mental Health Treatment: A retrospective cohort record-linkage Study of Patient Severity, Treatment Intensity and Mental Health Outcomes in the Dutch Patient Population"

Presentations

2022

Risk based incentives and access to preventive services. (RGHI Conference Erasmus)
Selective exercise of discretion in disability insurance awards (NETSPAR Conference)

2021

Stronger Together: Using group incentives to increase the demand for prevention (LACEA, ISS Seminar Series, ASHEcon, IHEA, HESG)
Risk based incentives and access to preventive services (IHEA)
Disability at youth: How do disability benefit impact employment and income in early adulthood (EUR Smarther Choices for Better Health)
Selective exercise of discretion in disability insurance awards (EUR Smarther Choices for Better Health)

Next steps...

The research conducted with the support of the Marie Sklodowska Curie action (MSCA) grant has highlighted the consequence sof mental health on labour force participation, and particularly the potential role of prevention schemes. My future research will build off the results from this grant and focus on how mental health prevention policies can impact mental health and consequently applications to disability benefits... hope to share more about this in the future.

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