Does Disability Insurance Improve Health and Well-Being? | Munich Center for the Economics of Aging - MEA


Publication Series of the MPI for Social Policy

Does Disability Insurance Improve Health and Well-Being?


The purpose of disability insurance (DI) is to protect people with health problems that limit their ability to work. We evaluate the effectiveness of DI benefit programs in delivering this protection by following people’s health and financial well-being after the take-up of DI benefits. This paper takes advantage of internationally harmonized panel data and the differences across DI programs in Europe and the United States, as well as their changes over time. We use several econometric approaches to account for the potential endogeneity of DI enrollment and sample selectivity. We find that self-reported health stabilizes after DI benefit receipt. Mental health improves more for DI benefit recipients than non-recipients relative to the beginning of DI benefit receipt. This effect is stronger in countries with more generous DI systems. The effects on objective health measures are positive but largely insignificant.

Publication Details

Axel Börsch-Supan


Tabea Bucher-Koenen


Felizia Hanemann