Take Up And Labor Supply Responses To Disability Insurance Earnings Limits PDF Download
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Author | : Judit Krekó |
Publisher | : |
Total Pages | : |
Release | : 2022 |
Genre | : |
ISBN | : |
Download Take-up and Labor Supply Responses to Disability Insurance Earnings Limits Book in PDF, ePub and Kindle
In most disability insurance programs beneficiaries lose some or all of their benefits if they earn above an earnings threshold. While intended to screen out applicants with high remaining working capacity, earnings limits can also distort the labor supply of beneficiaries. We develop a simple framework to evaluate this trade-off. We use a reduction in the earnings limit in Hungary to examine screening and labor supply responses. We find that the policy changed selection into the program modestly but reduced labor supply significantly. Viewed through the lens of our model, these findings suggest that the earnings threshold should be higher.
Author | : Judit Krekó |
Publisher | : |
Total Pages | : 0 |
Release | : 2022 |
Genre | : |
ISBN | : |
Download Take-up and Labour Supply Responses to Disability Insurance Earnings Limits Book in PDF, ePub and Kindle
In most disability insurance programs beneficiaries lose some or all of their benefits if they earn above an earnings threshold. While intended to screen out applicants with high remaining working capacity, earnings limits can also distort the labor supply of beneficiaries. We develop a simple framework to evaluate this trade-off. We use a reduction in the earnings limit in Hungary to examine screening and labor supply responses. We find that the policy changed selection into the program modestly but reduced labor supply significantly. Viewed through the lens of our model, these findings suggest that the earnings threshold should be higher.
Author | : Jonathan Gruber |
Publisher | : |
Total Pages | : 56 |
Release | : 1996 |
Genre | : Disability insurance |
ISBN | : |
Download Disability Insurance Benefits and Labor Supply Book in PDF, ePub and Kindle
Disability Insurance (DI) is a public program that provides income support to persons unable to continue work due to disability. The difficulty of defining disability, however, has raised the possibility that this program may be subsidizing the early retirement of workers who are not truly disabled. A critical input for assessing the optimal size of the DI program is therefore the elasticity of labor force participation with respect to benefits generosity. Unfortunately, this parameter has been difficult to estimate in the context of the U.S. DI program, since all workers face an identical benefits schedule. I surmount this problem by studying the experience of Canada, which operates two distinct DI programs, for Quebec and the rest of Canada. The latter program raised its benefits by 36% in January, 1987, while benefits were constant in Quebec, providing exogenous variation in benefits generosity across similar workers. I study this relative benefits increase using both simple `difference-in-difference' estimators and more parameterized estimators that exploit the differential impact of this policy change across workers. I find that there was a sizeable labor supply response to the policy change; my central estimates imply an elasticity of labor force non-participation with respect to DI benefits of 0.25 to 0.32. Despite this large labor supply response, simulations suggest that there were welfare gains from this policy change under plausible assumptions about preference parameters.
Author | : Susan Chen |
Publisher | : |
Total Pages | : 0 |
Release | : 2012 |
Genre | : |
ISBN | : |
Download Spousal Labor Supply Responses to Government Programs Book in PDF, ePub and Kindle
Disability is a permanent unexpected shock to labor supply which according to the theory of the added worker effect should induce a large spousal labor supply response. The Disability Insurance (DI) program is designed to mitigate the income lost due to disability. To the extent that it does this, it can crowd out the spousal labor supply response predicted by the added worker effect theory. Using a unique data that matches administrative data combining worker's earnings histories and disability insurance applications, this study finds that DI crowds out spousal labor force participation by 6 percent and the displacement spans multiple years. The estimated crowd-out effects are also larger for younger wife cohorts and cohorts with particular types of impairments such as musculoskeletal disease.
Author | : Jonathan Gruber |
Publisher | : |
Total Pages | : 48 |
Release | : 1994 |
Genre | : Age and employment |
ISBN | : |
Download Disability Insurance Rejection Rates and the Labor Supply of Older Workers Book in PDF, ePub and Kindle
Disability Insurance (DI), which provides income support to disabled workers, has been criticized for inducing a large fall in the labor force participation rate of older workers. We study the effects of one policy response designed to address this moral hazard problem: raising the rate at which DI claims are denied. Initial DI applications are decided at the state level, and, in response to a funding crisis for the DI program in the late 1970s, the states raised their rejection rates for first time applicants by 30% on average. The extent of this rise, however, varied substantially across states. We use this variation to estimate a significant reduction in labor force non-participation among older workers in response to denial rate rises. A 10% increase in denial rates led to a 2.7% fall in non- participation among 45-64 year old males; between 1/2 and 2/3 of this effect is a true reduction in labor force leaving, with the remainder accounted for by the return to work of denied applicants. We find some support for the notion that increases in denial rates effectively target their incentive effects to more able individuals; the fall in labor force non-participation was much stronger among more able workers, according to an anthropometric measure of disability.
Author | : Robert H. Haveman |
Publisher | : |
Total Pages | : 30 |
Release | : 1984 |
Genre | : Disability insurance |
ISBN | : |
Download Disability Transfers, Health Status and Economic Behavior Book in PDF, ePub and Kindle
Author | : Leo A. McManus |
Publisher | : |
Total Pages | : 48 |
Release | : 1978 |
Genre | : Disability evaluation |
ISBN | : |
Download The Effects of Disability on Lifetime Earnings Book in PDF, ePub and Kindle
Author | : Frederic P. Slade |
Publisher | : |
Total Pages | : 24 |
Release | : 2007 |
Genre | : |
ISBN | : |
Download Labor Supply Under Disability Insurance Book in PDF, ePub and Kindle
There has been a significant recent growth in the Social Security Administration's Disability Insurance (DI) program, both in the number of covered workers under the program and in the amount of monthly benefits, One possible factor causing this growth has been labor supply disincentives under the pro- gram. The labor supply decision by an individual involves the effect of the disability benefit structure (potential benefits) on labor force participation. Probit estimates from the 1969 original sample of the Longitudinal Retirement History Study (LRHS) indicated an elasticity of participation with respect to benefits of -0031 for married men aged 58-63, and -.023 for all men of the same age group. The magnitude of these estimates are much less than those found by authors such as Parsons, and suggest relatively insignificant efficiency losses in terns of reduced work effort.
Author | : Brent E. Kreider |
Publisher | : |
Total Pages | : 370 |
Release | : 1994 |
Genre | : |
ISBN | : |
Download Labor Force Attrition, Applications to the Social Security Disability Insurance Program, and Optimal Redistributive Taxation when Earnings and Eligibility are Uncertain Book in PDF, ePub and Kindle
Author | : Jonathan Gruber |
Publisher | : |
Total Pages | : 36 |
Release | : 2010 |
Genre | : |
ISBN | : |
Download Disability Insurance Rejection Rates and the Labor Supply of Older Workers Book in PDF, ePub and Kindle
Disability Insurance (DI), which provides income support to disabled workers, has been criticized for inducing a large fall in the labor force participation rate of older workers. We study the effects of one policy response designed to address this moral hazard problem: raising the rate at which DI claims are denied. Initial DI applications are decided at the state level, and, in response to a funding crisis for the DI program in the late 1970s, the states raised their rejection rates for first time applicants by 30% on average. The extent of this rise, however, varied substantially across states. We use this variation to estimate a significant reduction in labor force non-participation among older workers in response to denial rate rises. A 10% increase in denial rates led to a 2.7% fall in non- participation among 45-64 year old males; between 1/2 and 2/3 of this effect is a true reduction in labor force leaving, with the remainder accounted for by the return to work of denied applicants. We find some support for the notion that increases in denial rates effectively target their incentive effects to more able individuals; the fall in labor force non-participation was much stronger among more able workers, according to an anthropometric measure of disability.