Illness and disability-related labour market exit is a considerable challenge for many countries. In the OECD countries, the average direct expenditure on sickness and disability benefits amounts to more than two percent of GDP, and the number of disability beneficiaries corresponds to almost six percent of the population of working age (OECD, 2008). Many countries use vocational rehabilitation to reduce the problem of health-related labour market exit. Vocational rehabilitation measures include courses and other educational measures which aim at enhancing participants’ skills and qualifications in order to increase their labour market attachment.
Neither short-run nor long-run effects
Twenty percent (129 persons) of the sick-listed employees in the study tool part in at least one educational measure. On average the participants enrolled on the measure 15.6 months after the beginning of their sick leave and on average their course/educational measure lasted 8.4 months. The study assessed whether the educational measures had an effect on the sick-listed employees’ chances of returning to work for a new employer, as well as on the duration of this new employment. The study shows that during enrolment in a measure, the sick-listed employees had a lower probability of returning to work for a new employer than the sick-listed employees not participating in a measure. After completion of the measure, the participants had approximately the same chance of returning to work for a new employer as the sick-listed employees who did not participate. For those returning to work for a new employer, participation in a course or other educational measure did not have a significant effect on the duration of this new employment.
Given the expected effects of skills and qualifications enhancement, these findings are surprising. A possible explanation for the lack of a return-to-work effect is that the participation in educational measures causes the sick-listed employees to increase their expectations for the content and pay of a future job. This may reduce their job search activity and their willingness to accept job offers.
Data and method
The study used survey and register data relating to 637 employees aged between 18 and 55 who were sick-listed for at least three consecutive months in 1995. Two-thirds of the employees were sick-listed with low-back disorders, whereas one-third was sick-listed with other types of disorder. The sick-listed employees were interviewed up to four times during a 4½-year period after the beginning of their sick leave. The study used duration analyses, estimating the duration from the beginning of the sick leave until enrolment in a course/educational measure, the duration from the beginning of the sick leave until returning to work for a new employer, as well as the duration of this new employment. The analyses take account of both observed and unobserved differences between sick-listed employees who participated in an educational measure and sick-listed employees who did not participate.
Reference: OECD (2008). Sickness, Disability and Work: Breaking the Barriers. Volume 3: Denmark, Finland, Ireland, and the Netherlands. Organisation for Economic Co-operation and Development: Paris.