Employment effects of job counseling for disability insurance recipients

Abstract

Many countries implement policies to promote labor market inclusion of disability support recipients. It is unclear whether such measures work. We exploit a quasi-experimental setting in Australia where compulsory job counseling was introduced in 2012 affecting only those social security disability insurance (DI) recipients below age 35. Using longitudinal administrative data on all DI recipients and applying a difference-in difference estimator, we find that the policy was largely ineffective and neither improved employment nor earnings.