What is the effect of changing eligibility criteria for disability benefits on employment? A systematic review and meta-analysis of evidence from OECD countries.

BACKGROUND

Restrictions in the eligibility requirements for disability benefits have been introduced in many countries, on the assumption that this will increase work incentives for people with chronic illness and disabilities. Evidence to support this assumption is unclear, but there is a danger that removal of social protection without increased employment would increase the risk of poverty among disabled people. This paper presents a systematic review of the evidence on the employment effects of changes to eligibility criteria across OECD countries.

METHODS

Systematic review of all empirical studies from OECD countries from 1990 to June 2018 investigating the effect of changes in eligibility requirements and income replacement level of disability benefits on the employment of disabled people. Studies were narratively synthesised, and meta-analysis was performed using meta-regression on all separate results. The systematic review protocol was registered with the Prospective Register for Systematic Reviews (Registration code: PROSPERO 2018 CRD42018103930).

RESULTS

Seventeen studies met inclusion criteria from seven countries. Eight investigated an expansion of eligibility criteria and nine a restriction. There were 36 separate results included from the 17 studies. Fourteen examined an expansion of eligibility; six found significantly reduced employment, eight no significant effect and one increased employment. Twenty-two results examined a restriction in eligibility for benefits; three found significantly increased employment, 18 no significant effect and one reduced employment. Meta-regression of all studies produced a relative risk of employment of 1.06 (95% CI 0.999 to 1.014; I2 77%).

CONCLUSIONS

There was no firm evidence that changes in eligibility affected employment of disabled people. Restricting eligibility therefore has the potential to lead to a growing number of people out of employment with health problems who are not eligible for adequate social protection, increasing their risk of poverty. Policymakers and researchers need to address the lack of robust evidence for assessing the employment impact of these types of welfare reforms as well as the potential wider poverty impacts.