Disability insurance

About: Disability insurance is a research topic. Over the lifetime, 1928 publications have been published within this topic receiving 33621 citations. The topic is also known as: disability income insurance & income protection.

The Rise in the Disability Rolls and the Decline in Unemployment

Abstract: Between 1984 and 2001, the share of nonelderly adults receiving Social Security Disability Insurance income (DI) rose by 60 percent to 5.3 million beneficiaries. Rapid program growth despite improving aggregate health appears to be explained by reduced screening stringency, declining demand for less skilled workers, and an unforeseen increase in the earnings replacement rate. We estimate that the sum of these forces doubled the labor force exit propensity of displaced high school dropouts after 1984, lowering measured U. S. unemployment by one-half a percentage point. Steady state calculations augur a further 40 percent increase in the rate of DI receipt.

Insuring Consumption Against Illness

Abstract: One of the most sizable and least predictable shocks to economic opportunities in developing countries is major illness. We investigate the extent to which families are able to insure consumption against major illness using a unique panel data set from Indonesia that combines excellent measures of health status with consumption information. We find that there are significant economic costs associated with major illness, and that there is very imperfect insurance of consumption over illness episodes. These estimates suggest that public disability insurance or subsidies for medical care may improve welfare by providing consumption insurance.

Labor Supply Effects of Social Insurance

Abstract: This chapter examines the labor supply effects of social insurance programs. We argue that this topic deserves separate treatment from the rest of the labor supply literature because individuals may be imperfectly informed as to the rules of the programs and because key parameters are likely to differ for those who are eligible for social insurance programs, such as the disabled. Furthermore, differences in social insurance programs often provide natural experiments with exogenous changes in wages or incomes that can be used to estimate labor supply responses. Finally, social insurance often affects different margins of labor supply. For example, the labor supply literature deals mostly with adjustments in the number of hours worked, whereas the incentives of social insurance programs frequently affect the decision of whether to work at all. The empirical work on unemployment insurance (UI) and workers' compensation (WC) insurance finds that the programs tend to increase the length of time employees spend out of work. Most of the estimates of the elasticities of lost work time that incorporate both the incidence and duration of claims are close to 1.0 for unemployment insurance and between 0.5 and 1.0 for workers' compensation. These elasticities are substantially larger than the labor supply elasticities typically found for men in studies of the effects of wages or taxes on hours of work. The evidence on disability insurance and (especially) social security retirement suggests much smaller and less conclusively established labor supply effects. Part of the explanation for this difference probably lies in the fact that UI and WC lead to short-run variation in wages with mostly a substitution effect. Our review suggest that it would be misleading to apply a universal set of labor supply elasticities to these diverse problems and populations.

Economic analysis of transfer programs targeted on people with disabilities

Abstract: This chapter reviews the behavioral and redistributive effects of transfer programs targeted at working-age people with disabilities. While we primarily focus on the United States, we also include programs in the Federal Republic of Germany, The Netherlands, and Sweden. We look at how the economic well-being of people with disabilities varies across people and over time. We then present a brief history of Social Security Disability Insurance and Supplemental Security Income programs and review the evidence that attempts to explain their growth. We then review the literature on the labor supply behavior of people with disabilities and how that supply is affected by disability program characteristics. We end with a summary of our findings and a discussion of the major unresolved issues in the disability literature.