CSB Working Paper, 2013, 3: Do labor force evolutions affect the work incapacity caseload?

Over the last two decades, the number of individuals entitled to work incapacity (WI) benefits increased strongly in Belgium, the Netherlands, Denmark and Sweden. The caseload has consequently increased but this has happened at a very different pace and to a very different degree. In order to draw correct conclusions regarding the actual growth in national caseload and to gain a new perspective on the very large cross-national variation, we introduce corrections on the growth of WI benefit uptak…

Over the last two decades, the number of individuals entitled to work incapacity (WI) benefits increased strongly in Belgium, the Netherlands, Denmark and Sweden. The caseload has consequently increased but this has happened at a very different pace and to a very different degree. In order to draw correct conclusions regarding the actual growth in national caseload and to gain a new perspective on the very large cross-national variation, we introduce corrections on the growth of WI benefit uptake. By controlling for the evolution of the labor force and its respective gender and age components, we are able to formulate an answer to the following question: ‘To what extent can the increase and cross-national variation in work incapacity caseload be explained by the evolution of the labor force and its components?’ The results show that the evolution of the female labor force, and this mainly in the age brackets 15-49, had the greatest impact on the growth of WI caseload. We conclude that the corrections, based on the evolution of the different components of the labor force, reduce the growth rate of national WI caseload and narrow the gap in cross-national variation. Nevertheless, a proportion of national growth and cross-national variation remains unexplained.