The previous literature has brought consistent evidence that many Disability Insurance (DI) beneciaries retain a considerable capacity to work (Autor & Duggan, 2006; Bound, 1989; French & Song, 2014; Maestas, Mullen, & Strand, 2013). In light of this, governments in several countries have developed return-to-work programs that allow DI recipients to combine benefits and work income. Kostol & Mogstad (2014) have shown that this type of policy reduces the cost for social security while enhancing the welfare of DI recipients.
Such program has been implemented in Belgium in 1996 offering DI recipients to return to work on a part-time basis and keep a share of their benefits. Participation remains, however, relatively low with only 11% of long-term DI recipients (NIHDI, 2019). Among the reasons for low participation, our discussions with stakeholders have highlighted the lack of accessible information about the program rules and incentives. The most motivated individuals would find the information needed after extensive research on their mutuality fund's website, only to discover that it is of relatively high complexity and often described in juridical terms. This echoes the findings of Bhargava and Manoli (2015) who showed that informational complexity is an important contributor to the puzzle of low participation in government-sponsored programs.
With that in mind, we designed a low-cost informational intervention in collaboration with the Belgian National Institute for Health and Disability Insurance (NIHDI). A nudge was added to an existing communication addressed to all beneficiaries upon their entry to long-term disability (i.e. after 12 months on DI).
This type of informational intervention has been shown to be a cost-effective way to increase program participation in other contexts (Bhargava & Manoli, 2015; Liebman & Luttmer, 2015). For sickness and disability insurance, we are only aware of two other studies that implement nudges in the form of information meetings organized by the social security administration (Johansson & Lindahl, 2013; Markussen, Roed, & Schreiner, 2018). In comparison, our nudge within an existing communication and with the help of an online calculator should be highly cost-effective since it does not involve case-workers or require in-person meetings.