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Award errors and permanent disability benefits in Spain
Jiménez-Martín, Sergi; Labeaga, José M.; Vilaplana Prieto, Cristina
Universitat Pompeu Fabra. Departament d'Economia i Empresa
There is a controversial debate about the effects of permanent disability benefits on labormarket behavior. In this paper we estimate equations for deserving and receiving disabilitybenefits to evaluate the award error as the difference in the probability of receiving anddeserving using survey data from Spain. Our results indicate that individuals aged between55 and 59, self-employers or working in an agricultural sector have a probability of receiving a benefit without deserving it significantly higher than the rest of individuals. We also find evidence of gender discrimination since male have a significantly higher probability of receiving a benefit without deserving it. This seems to confirm that disability benefits are being used as an instrument for exiting the labor market for some individuals approaching the early retirement or those who do not have right to retire early. Taking into account that awarding process depends on Social Security Provincial Department, this means that some departments are applying loosely the disability requirements for granting disability benefits.
Labour, Public, Development and Health Economics
disability benefits
award error
early retirement
social security
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