Self Reported Disability and Reference Groups

Social networks and social interactions affect individual and social norms. We develop a direct test of this using Dutch survey data on how respondents evaluate work disability of hypothetical people with some work related health problem (vignettes). We analyze how the thresholds respondents use to decide what constitutes a (mild or more serious) work disability depend on the number of people receiving disability insurance benefits (DI) in their reference group. We find that reference group effects are significant and contribute substantially to an explanation of why self-reported work disability in the Netherlands is much higher than in, for example, the US.