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October 25, 2017

Cluster-Seminar Public Finances and Living Conditions

Stricter Eligibility Criteria in Disability Insurance: Effects on Diagnoses Protection


October 25, 2017
12:30 - 13:30


DIW Berlin im Quartier 110
Room 5.2.010
Mohrenstraße 58
10117 Berlin


Stefan Etgeton, Songül Tolan

Since the 2001 reform of the disability pension in Germany, occupational invalidity does no longer qualify for a pension. While before the reform the incapability to work in the former job was sufficient for a pension claim, the new regulations require an incapability to work at all. Yet, cohorts born before 1961 have been exempted from the reform to protect their confidence in former legislation. This exogenous variation along birth cohorts allows us to estimate the causal reform effects on pension take-up rates and diagnoses composition using a Regression Discontinuity Design. Working with a 25% sample from the registers of the Statutory Pension Scheme, we show that take-up drops significantly. A disproportionally high share of newly non-eligible individuals suffers from musculoskeletal disorders.