Disability insurance screening and worker health

Abstract

We provide new evidence on the returns to more targeted disability insurance (DI) programs in terms of labor force participation, program spillovers, and worker health. To do so, we analyze Austrian workers after a workplace injury that experience differential levels of application screening. We find that when workers face stricter screening, they are more likely to remain in the labor force. However, we estimate no statistical differences in any physical or mental health outcomes, and can rule out large effects on overall healthcare utilization. Our findings imply that imposing stricter DI screening can yield large fiscal benefits, on the margin.