Factors Associated with Occupational Disability Classification

To provide disabled people with the same opportunities to participate in working life as everyone else, certain measures, such as wage subsidies, compensating for a reduced work capacity, might be necessary. To ascertain that these measures are limited to the most needy a system that identifies the target group is required. The Swedish Public Employment Service’s (PES’) classification of occupational disability constitutes such a system. In this study we document how jobseekers’ demographic characteristics, socioeconomic position, and health-related conditions are associated with being classified as occupationally disabled by the PES, and how this classification might be distorted by unintended incentive mechanisms. Our empirical analyses show that both previous health conditions and previous socioeconomic disadvantages were associated with a higher likelihood of being classified as occupationally disabled. To what extent these jobseekers actually had impairments that entailed reduced work capacity cannot be concluded from the available data, but our results indicate that also the goals set by the government may have influenced how the PES classified jobseekers.