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The Effect of a Compulsory Schooling Reform on Disability Pensioning – Evidence from the Danish Registers

Nabanita Datta Gupta and Steen Bengtsson
Annals of Economics and Statistics
No. 119-120, SPECIAL ISSUE ON HEALTH AND LABOUR ECONOMICS (December 2015), pp. 95-121
Published by: GENES on behalf of ADRES
DOI: 10.15609/annaeconstat2009.119-120.95
Stable URL: http://www.jstor.org/stable/10.15609/annaeconstat2009.119-120.95
Page Count: 27
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The Effect of a Compulsory Schooling Reform on Disability Pensioning – Evidence from the Danish Registers
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Abstract

A growing literature is examining the effects of compulsory schooling reforms on various measures of health later in life (SRH, hospitalization, mortality, BMI, health behaviors and self-reported work disability). However, few studies explore spillover effects of education on disability, and even fewer allow for heterogeneous treatment effects by gender. Yet, disability pensions constitute a large share of health care spending and have implications for health care utilization. Using comprehensive register data from Denmark providing administrative data on both health and disability on the entire Danish population, coupled with a major compulsory schooling reform from 1958 that substantially lowered the costs of education and enhanced its quality in rural areas, we estimate Probit, OLS and linear treatment effects models, which show that both men and women in rural born cohorts subject to the reform have a lower rate of disability pensioning, and fewer medical diagnoses for chronic illnesses later in life, compared to urban born counterparts and pre-reform cohorts from both regions. Furthermore, we find that an important channel of transmission of education to disability and health for both men and women is through higher income. A possible explanation for the symmetric effects of education on male and female disability in this setting could be that women in older cohorts in Denmark are more active in the labour market compared to other countries. JEL: I12, I21. / KEY WORDS: Register Data, Disability Pension, Education, School Reform, Gender.

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