What is driving the increasing youth disability insurance receipt in Norway?

There is there a concerning trend in Norway: the proportion of 30-year-olds receiving disability benefits has more than doubled in the past 25 years. This increase coincides with various societal changes, including a rise in mental health diagnoses among youth, heightened competition in education, reforms in social insurance, shifts in the labor market due to automation, and demographic changes due to immigration and older individuals remaining in the workforce longer. To understand this phenomenon, a comprehensive research project has been initiated. Utilizing extensive administrative data, surveys, and comparative studies across Nordic countries, the project aims to dissect the contributing factors to this rise in youth disability. The research is structured into six work packages, each focusing on a specific aspect like the increase in educational competition, labor market shifts, and the growing prevalence of mental health diagnoses. The primary objective is to gain a nuanced understanding of the factors driving the increase in youth disability, especially the widening socioeconomic gradient. By providing empirical evidence, the project seeks to inform and improve the foundation for the social insurance system, enhancing policy design in Norway.

The share of people aged 30 who receive disability benefits in Norway has more than doubled over the previous 25 years. Despite several partial explanations, this dramatic rise is not well understood. It coincides with several other potentially related societal changes: • A rise in the share of youths receiving diagnoses, treatment and medication for mental illness, and an expanded treatment capacity. • Increased competition in the educational sector. • Changes and reforms in the social insurance system. • Structural changes in the labor market, machines and automation changing the composition of jobs. • Increased supply of labor, potentially in competition with youth labor, from immigrants as well as prolonged labor market participation among the elderly. The ambition of this project is to solve this youth disability puzzle by carefully assembling these pieces of potential explanations, and – to the extent possible – quantify their importance. Our motivation is to provide answers to the seemingly simple question “Why is youth disability rising?”, a question of the utmost importance for policy design in Norway. To do so, we assemble an interdisciplinary team consisting of researchers from economics, psychology and educational science, and employ high quality administrative data covering health care, schools, higher education, labor markets, family links and social insurance, as well as surveys. We also put the Norwegian experience into a larger context by comparing Norway with other countries in a comparative research design for the Nordic countries. The project has six work packages, all building on extensive use of detailed, linkable, micro data: WP1: Decomposing the rise in youth disability WP2: Nordic comparison WP3: Educational competition/The school system WP4: The labor market WP5: Medicalization WP6: Poverty