Municipal unemployment and municipal typologies as predictors of disability pension in Norway : Analytical framework and results of a multilevel analysis

Abstract

BACKGROUND: Internationally, Norway is a welfare society with unique social security benefits. The increased health care expenditures that are not expected to decrease in the coming decades are presenting Norway and the other Nordic countries with major fiscal challenges. Disability pensioning (DP) is one of the benefits in which the Nordic countries have a high utilization rate compared to other European countries. Previous research has found geographic variation in the utilization of DP in Norway. Further information on the predictors of this geographic variation is therefore needed in order to better understand the underlying mechanisms of DP. OBJECTIVE: (i) To investigate municipal unemployment and municipal typologies as predictors of geographic variation in DP utilization in order to better understand contextual mechanisms of DP, and (ii) to describe the Norwegian welfare system with its relatively generous social security benefits with regards to DP and unemployment. METHOD: A multi-level random intercept logistic regression model is used in order to study the effects of some of the area-level predictors on DP. Data on the entire Norwegian population from the historical event database “FD-Trygd” has been combined with aggregated data on municipal characteristics of all the 430 municipalities from the Norwegian social science data services’ (NSD) regional database. RESULTS: The area-level predictor that explained most of the between-municipality variation in DP, was municipal unemployment. From bivariate analysis the results show that municipalities characterized by having high unemployment rates had about 1% higher DP rates compared to municipalities with low unemployment rates. CONCLUSION: The study finds geographic variation in DP. Both individual factors such as age and education, and municipal-level factors such as industry affiliation and centrality affect DP utilisation. The study suggests that the municipal-level factor which influences Dp the most, is municipal unemployment.