Why does temporary work increase disability insurance inflow?

B-Tier
Journal: Labour Economics
Year: 2025
Volume: 96
Issue: C

Authors (3)

Koning, Pierre (not in RePEc) Muller, Paul (Vrije Universiteit Amsterdam) Prudon, Roger (not in RePEc)

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We show that workers with fixed-term contracts are substantially more likely to apply for and be awarded disability insurance (DI) benefits than permanent workers. We study whether this differential can be explained by (i) selection of worker types into contracts, (ii) the relation between contract type and the risk of illness, (iii) differences in employer support during illness, and (iv) differences in labour market prospects of ill workers. We find that selection actually masks part of the differential, whereas the impact of contract type on health is limited. In contrast, the difference in employer support during illness is a significant cause of the heightened DI risk of temporary workers, especially in slack labour markets. We therefore conclude that, conditional on being ill, workers with fixed-term contracts face different support structures and incentives that make them more likely to ultimately apply for and be awarded DI.

Technical Details

RePEc Handle
repec:eee:labeco:v:96:y:2025:i:c:s0927537125000466
Journal Field
Labor
Author Count
3
Added to Database
2026-01-26