Cost-Effectiveness of Policies Aimed at Prolonging Working Careers: The Role of Health

Context of the project: Need to increase employment rate

Due to economic constraints and recent demographic trends, European governments need to counter increasing rates of absenteeism and challenges of ageing population, and maintain dynamic labour market participation.

In this context, the provision of disability and sickness benefits represents a double challenge for the sustainability and adequacy of social security:

The number of recipients of disability benefits has been increasing in consistent way.
In Finland, around a fifth of total working age population has a self-assessed disability.
In the OECD countries around 2 per cent of the GDP is accorded to sickness and disability programmes.
Under half of the people with a disability are working and almost one in four lives in poverty (OECD 2008).

Connections between health and employment are well studied, but policies do not necessarily take this into account. It should be well understood in employment strategies that health impacts on

The possibilities of near-retirement people in prolonging their careers, and
The chances of long-term unemployed in re-entering labour market.

Consequently, when we evaluate policies aimed at increasing employment rates, we should focus more on health issues impacting on the success of these policies.

Sources:
OECD (2008) Sickness, disability and work: breaking the barriers. Paris: OECD.
Principal objectives of the project

Producing and gathering evidence on the cost-effectiveness of rehabilitation, strategies aimed at reintegration of disabled people, people on sickness leave and long-term unemployed people into the labour market and policies aimed at prolonging careers of near-retirement people. In short, we will study the role of health in increasing employment.
Policy recommendations for the design of more cost-effective social policies will be made based on data analyses, comparative policy analysis and review of best practices.
Creation of an international expert network in the field of rehabilitation, reintegration, disability and health policies in connection with labour markets and focusing on the cost-effectiveness of these policies.

Research questions studied in the project

Many policies have already been put in place in order to increase working opportunities as well as work incentives of the groups with weak labour market attachment. How well have they worked? It is a complex issue and needs a wider consideration of people’s health and macro-level factors. The following questions are guiding the research task:

To what extent ill health impedes people from working and how could health policies increase participation in the labour market?
What do we know about sick people working or giving up work?
What is the work capacity of near-retirement people?
How does health of social assistance recipients and long-term unemployed influence their work capacity? How does it impact on the success of active labour market policies?
How can health impact on employment/retirement of different groups of population?
What are the consequences of these issues for cost-effectiveness of policies in place?
What can we learn from other countries?