Disability policies across Europe: Reforms and employment outcomes for workers aged 50+

We investigate the association of countries’ disability policies to older workers’ employment status. We used panel data from the Survey of Health, Aging, and Retirement in Europe (SHARE) for the years 2004 and 2013 in combination with indicator scores to measure disability policies and their changes, developed by the OECD. We focus particularly on changes in employers’ responsibilities and incentives in disability policy. The level of employer responsibility however varies considerably across the OECD and–while accounting comprehensively for other reform components–we investigate this policy dimension and its consequences for the labor market attachment of workers with health problems. We obtain a mixed pattern for the indicator that describes employers’ obligations towards their workers. Our estimates suggest a positive association of employment with past scores, in particular for persons with poor health. Since this policy approach is fairly new throughout the OECD, it is plausible that reforms in this area require more time to change behavior than other, more familiar types of policies. Overall we draw the following conclusions from our analyses. In general, policies might require some time before their effects can be measured. Second, aggregate indicators may mask differentiated reactions to policies and for policy evaluation it remains essential to analyze disaggregated indicators. Third, policies change incentives and induce reactions not only by those addressed, but potentially also by other, not-targeted, groups of the population.