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Sickness, Disability and Work: Breaking the Barriers

A Synthesis of Findings across OECD Countries

image of Sickness, Disability and Work: Breaking the Barriers

Too many workers leave the labour market permanently due to health problems or disability, and too few people with reduced work capacity manage to remain in employment. This is a social and economic tragedy common to virtually all OECD countries. It also raises an apparent paradox that needs explaining: Why is it that the average health status is improving, yet large numbers of people of working age are leaving the workforce to rely on long-term sickness and disability benefits?  

This report, the last in the OECD series Sickness, Disability and Work: Breaking the Barriers, synthesises the project’s findings and explores the possible factors behind the paradox described above. It highlights the roles of institutions and policies and concludes that higher expectations and better incentives for the main actors – workers, employers, doctors, public agencies and service providers – are crucial. Based on a review of good and bad practices across OECD countries, this report suggests a series of major reforms are needed to promote employment of people with health problems. 

The report examines a number of critical policy choices between: tightening inflows and raising outflows from disability benefit, and promoting job retention and new hiring of people with health problems. It questions the need for distinguishing unemployment and disability as two distinct contingencies, emphasises the need for a better evidence base, and underlines the challenges for policy implementation.  

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The Direction of Recent Disability Policy Reforms

Sickness and disability outcomes are still disappointing in most countries, with low employment rates and high benefit dependence, calling for further often unpopular reforms. In the past 10-15 years, countries have started to shift their approach away from merely paying benefits to people with disability towards helping them stay in, or return to, work. This chapter outlines the main directions of recent reforms across the OECD and explores the question whether or not changes have gone far enough to reduce benefit dependency and increase employment rates. The chapter concludes that i) policy matters: reform has had a major impact on the observed outcomes, especially the disability beneficiary rate; and ii) policies are moving in the right direction, with considerable convergence of policies despite continued structural differences. However, in most countries more needs to be done.

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