DISABILITY AND WORK: Lessons for Israel from an OECD study

1. Annual Conference/MOITAL Tel Aviv, 15 March 2011 DISABILITY AND WORK:Lessons for Israelfrom an OECD study Christopher Prinz Employment Analysis and Policy Division www.oecd.org/els/disability

2. OUTLINE OF THE PRESENTATION • The aims of disability policy • Selected key outcomes • Policy lessons from across the OECD • Conclusions

3. AIMS OF SICKNESS AND DISABILITY POLICY • Provide income security in periods of (short-term or long-term) work incapacity • Help people stay in the labour market or return to it as quickly as possible • Reconcile these potentially contradictory goals • Need to assess work capacity and identify those who need benefits, temporarily or permanently, and those who need employment supports

4. POLICY COMPLEXITIES • Target group: Policies have to serve a very diverse group, with diverse work capacity and needs • Range of policy stakeholders involved is very broad • Comprehensive reform of other social systems • Unemployment, social assistance, and pension schemes • Reforms of disability schemes lagging behind, which is one reason for why disability benefit systems have become a benefit of last resort in many OECD countries

5. Gradually increasing disability benefit recipiency … Disability benefit recipients in per cent of the population aged 20-64in 16 OECD countries, early 1980s and 2007/2008 Source: OECD (Sickness, Disability and Work review)

6. … and increasingly because of mental disorders Proportion of inflows into disability benefit due to mental health conditions in 17 OECD countries, mid-1990s and 2007/08 Source: OECD (Sickness, Disability and Work review)

7. “Medicalisation” of labour market problems Unemployment rate (blue line) and disability benefit recipiency rate (black line), two exemplary OECD countries, 1970-2008 Source: OECD (Sickness, Disability and Work review)

8. Only about four in ten peoplewith disability have a job … Employment rates of people with and without disability in 29 OECD countries, latest available year (mid to late-2000s) Source: OECD (Sickness, Disability and Work review)

9. … unemployment is twice as high for people with disability … Unemployment rates of people with and without disability in 28 OECD countries, latest available year (mid to late-2000s) Source: OECD (Sickness, Disability and Work review)

10. … and poverty risks are also much higherfor people with disability Poverty rates (at 60% median income) and relative poverty risks in 29 OECD countries, by disability status, mid-2000s Source: OECD (Sickness, Disability and Work review)

11. HAVE COUNTRIES REACTED? • Overall shift towards employment-oriented measures • Reforms have become more comprehensive… • …and increasingly include changes to benefit systems • Reforms have led to better outcomes in a number of OECD countries (especially falling benefit inflows) • But, difficult to win society over comprehensive change => OECD conclusion: more needs to be done; policies and institutions in place are still not good enough

12. Stronger focus on employment-oriented measures Proportion of vocational rehabilitation and employment-related public spending in total incapacity-related spending, selected OECD countries, 1990-2007 Source: OECD (Sickness, Disability and Work review)

13. POLICY LESSONS FOR ISRAEL 1. Improved procedures and stronger cooperation across agencies • Improve cross-agency cooperation • Examples: merging of agencies; information exchange; cross-funding; financial incentives • Israel: awareness increasing but still policy in silos • Engage with clients as early as possible • Examples: early involvement of social insurance; no benefit without testing of reintegration potential • Israel: vocational rehabilitation coming too late

14. POLICY LESSONS FOR ISRAEL 2. Responsibilities and incentives for employers and individuals • Strengthen individual and employer responsibilities • Examples: activation framework; much strengthened employer obligations including financial incentives • Israel: policies largely of voluntary nature; employers not so far involved as stakeholders • Make work pay for individuals • Examples: wage subsidies instead of benefits • Israel: improvements ongoing; benefits still relatively high for those with poor qualifications

15. CONCLUSIONS • Policy matters: Policy is behind the disability problem; policy reorientation is needed to solve it • Incentives and responsibilities of key actors, and cooperation between them is not good enough • Reform needs to be comprehensive and based on good evidence as well as a broad consensus • Good implementation needs a change in mindsets of all stakeholders; and better collaboration of government, social partners and civil society

16. OECD PUBLICATIONS & ACTIVITIES • Mental Health and Work project (new project, ongoing) • Expert Meeting 2010: see www.oecd.org/els/disability • Sickness, Disability and Work: Breaking the Barriers (2006-10) • A Synthesis of Findings Across OECD Countries, OECD, 2010. • Canada: Time for structural reform, OECD, 2010. • High-Level Policy Forum: see www.oecd.org/els/disability/stockholmforum • Sweden: Will the recent reforms make it?, OECD, 2009. • Volume 3: Denmark, Finland, Ireland and the Netherlands, OECD, 2008. • Volume 2: Australia, Luxembourg, Spain and United Kingdom, OECD, 2007. • Volume 1: Norway, Poland and Switzerland, OECD, 2006. • Transforming Disability into Ability, OECD, 2003