Publications

Waiting times for mental health treatment have been increasing in many countries. Using administrative data on all inhabitants of the Netherlands and exploiting exogenous variation at the municipality level, I find that these waiting times have substantial repercussions on labor market outcomes for at least eight years after the start of treatment. A one-month (0.5 SD) increase in waiting time decreases the probability of employment by two percentage points. Vulnerable groups with lower educational attainment or a migration background are especially affected given that the impact of waiting time is larger for them and their average waiting time is longer.

We show that workers with fixed-term contracts are substantially more likely to apply for and be awarded disability insurance (DI) benefits than permanent workers. We study whether this differential can be explained by (i) selection of worker types into contracts, (ii) the relation between contract type and the risk of illness, (iii) differences in employer support during illness, and (iv) differences in labour market prospects of ill workers. We find that selection actually masks part of the differential, whereas the impact of contract type on health is limited. In contrast, the difference in employer support during illness is a significant cause of the heightened DI risk of temporary workers, especially in slack labour markets. We therefore conclude that, conditional on being ill, workers with fixed-term contracts face different support structures and incentives that make them more likely to ultimately apply for and be awarded DI.

While a large share of Disability Insurance recipients in OECD countries are expected to recover, outflow rates from temporary disability schemes are typically negligible. We estimate the disincentive effects of disability benefits on the response to a (mental) health improvement using administrative data on all Dutch disability benefit applicants. We compare those below the DI eligibility threshold with those above and find that disincentives significantly reduce work resumption after health improves. Approximately half of the response to recovery is offset by benefits. Estimates from a structural labor supply model suggest that disincentives are substantially larger when the worker's earnings capacity is fully restored.tem