Showing papers on "Disability insurance published in 2019"

Disability Benefits, Consumption Insurance, and Household Labor Supply

Abstract: While a mature literature finds that Disability Insurance (DI) receipt discourages work, the welfare implications of these findings depend on two rarely studied economic quantities: the full cost of DI allowances to taxpayers, summing over DI transfer payments, benefit substitution to or from other transfer programs, and induced changes in tax receipts; and the value that individuals and families place on receiving benefits in the event of disability. We comprehensively assess these missing margins in the context of Norway's DI system, drawing on two strengths of the Norwegian environment. First, Norwegian register data allow us to characterize the household impacts and fiscal costs of disability receipt by linking employment, taxation, benefits receipt, and assets at the person and household level. Second, random assignment of DI applicants to Norwegian judges who differ systematically in their leniency allows us to recover the causal effects of DI allowance on individuals at the margin of program entry. Accounting for the total effect of DI allowances on both household labor supply and net payments across all public transfer programs substantially alters our picture of the consumption benefits and fiscal costs of disability receipt. While DI allowance causes a significant increase in household income and consumption on average, it has little impact on income or consumption of married applicants because spousal earnings responses (via the added worker effect) and benefit substitution entirely offset DI benefit payments among those who are allowed relative to those who are denied. To develop the welfare implications of these findings, we estimate a dynamic model of household behavior that translates employment, reapplication and savings decisions into revealed preferences for leisure and consumption. We find that household valuation of receipt of DI benefits is considerably greater for single and unmarried individuals than for married couples because spousal labor supply substantially buffers household income and consumption in the event of DI denial.

Work Disability in Australia: An Overview of Prevalence, Expenditure, Support Systems and Services.

Abstract: Purpose This study sought to describe Australian systems of income support for people with work disability. Specific aims were to summarise and compare the features of the income support systems, including the rehabilitation and employment services funded or provided by those systems, and factors affecting transition between systems. Further objectives were to estimate the prevalence of work disability in Australia and the national expenditure on work disability income support. Methods A mixed methods project involving collation and analysis of existing publicly available documentation and data, and interviews with 25 experts across ten major systems of income support. The prevalence of work disability and expenditure in each system, and in total, was estimated using publicly accessible data sources. System features and service models were synthesised from data sources, tabulated and compared qualitatively. Results In Australia during the 2015/2016 financial year an estimated 786,000 people with work disability received income support from a Commonwealth, state, territory or private source. An additional 6.5 million people accessed employer provided leave entitlements for short periods of work incapacity. A total of $37.2 billion Australian dollars was spent on income support for these people during the year. This support was provided through a complex array of government authorities, private sector insurers and employers. Service models vary substantially between systems, with case management the only service provided across all systems. Healthcare and return to work services were provided in some systems, although models differed markedly between systems. Income support ranged from 19 to 100% of earnings for a person earning the average weekly Australian wage pre-disability. There is a paucity of information relating to movement between systems of support, however it is likely that many thousands of people with long periods of work disability transition between systems annually. Conclusions This study demonstrates the substantial financial and human impact of work disability on Australian society. Findings indicate multiple opportunities for reducing the burden of work disability, including aligning case management and healthcare service models, and engaging employers in prevention and rehabilitation. The findings suggest a need for greater interrogation and evaluation of Australian work disability support systems.

A Timely Problem: Parental Leave During Medical Training

Abstract: Shifting demographics and concerns about burnout prevention merit a reexamination of existing structures and policies related to leaves of absence that may be necessary during medical training. In this Invited Commentary, the authors address the issue of parental leave for medical students and residents. Discussion about parental leave for these trainees is not new. Despite decades of dialogue, leave policies throughout the undergraduate and graduate medical education continuum lack standardization and are currently ill defined and inadequate. There are a number of barriers to implementation. These include stigma, financial concerns, workforce and duty hours challenges, and the historically rigid timeline for progression from one stage of medical training to the next. Potential solutions include parent-friendly curricular innovations, competency-based medical education, and provision of short-term disability insurance. Most important, adopting more flexible approaches to graduation requirements and specialty board examination eligibility must be addressed at the national level. The authors identify cultural and practical challenges to standardizing parental leave options across the medical education continuum and issue a call to action for implementing potential solutions.

Locate Your Nearest Exit: Mass Layoffs and Local Labor Market Response:

Abstract: Large shocks to local labor markets can cause long-lasting changes to employment, unemployment, and the local labor force. This study examines the relationship between mass layoffs and the long-run...

Identifying Work Capacity and Promoting Work: A Strategy for Modernizing the SSDI Program.

Abstract: The Social Security Disability Insurance (SSDI) program, which provides income support to individuals who become unable to work because of a disability, has not been substantially reformed since th...

Financial Incentives and Earnings of Disability Insurance Recipients: Evidence from a Notch Design

Abstract: Most countries reduce Disability Insurance (DI) benefits for beneficiaries earning above a specified threshold. Such an earnings threshold generates a discontinuous increase in tax liability—a notch—and creates an incentive to keep earnings below the threshold. Exploiting such a notch in Austria, we provide transparent and credible identification of the effect of financial incentives on DI beneficiaries’ earnings. Using rich administrative data, we document large and sharp bunching at the earnings threshold. However, the elasticity driving these responses is small. Our estimate suggests that relaxing the earnings threshold reduces fiscal cost only if program entry is very inelastic.

Positive behaviour support in Australian disability policy, and its future with the National Disability Insurance Scheme (NDIS)

Abstract: Positive behaviour support features prominently in Australian state and federal disability policy, and with the move to the National Disability Insurance Scheme (NDIS), and the continuing role of the states in safeguarding the rights of people with disabilities, the representation of positive behaviour support in Australian policy is an important consideration. Extending a recent review of Australian state positive behaviour support policies, this study examined the NDIS quality and safeguarding framework. Using the concept of policy diffusion, the subject of restrictive practices was used to argue the risks associated with the representation of positive behaviour support in current Australian disability policy. This examination revealed that while positive behaviour support is aligned to the founding principles of the NDIS, it is represented inaccurately in NDIS policy. Further, policies for positive behaviour support are predominantly aligned to restrictive practices and contain inaccurate definitions of positive behaviour support. There is support for imitation and coercion in the diffusion (or “spread”) of positive behaviour support policy in Australia, and the potential ramifications for jurisdictions implementing positive behaviour support policy without considering the accuracy of how positive behaviour support is presented is discussed.

The moralization of labor. Establishing the social responsibility of employers for disabled workers

Abstract: As a “fictitious commodity” (Polanyi), that cannot be separated from the human being who is its owner, labor has a special moral significance. However, this moral quality is not a given but must be asserted in struggles over the value of labor. With the example of disabled workers in Switzerland, this chapter examines the moralization of labor as a means to revalue a category of workers who range far down the labor queue. Moralization mediates the tension between the normative societal goal of inclusion for disabled people and the freedom of employers to select the most “productive” workers. Drawing on the theoretical approach of the Economics of Convention the chapter analyzes the valuation frames proposed by economic and welfare state actors in political debates over the establishment of the Swiss disability insurance and the role of employers regarding occupational integration. A core concept used in negotiations of the value of disabled labor in the public arena and within individual businesses is the “social responsibility” of employers. Historically, employers’ associations successfully promoted the liberal principle of voluntary responsibility to prevent state interference in the labor market. In contrast, disability insurance argues predominantly within the market and the industrial convention to “sell” its clientele in the context of employer campaigns and case-related interactions with employers. Only recently, both sides started to reframe the employment of disabled people as a win–win affair, which would reconcile economic self-interest and the common good.

Adverse outcomes of sick leave due to mental disorders: A prospective study of discordant twin pairs.

Abstract: Aims: The aim of this study was to investigate whether sick leave due to different mental disorders increased the risk of reoccurring sick-leave, disability pension and unemployment, taking genetics and shared environment into account. Methods: This register-based cohort study contains 2202 discordant twin pairs 18–64 years old, where one twin had sick leave due to a mental disorder 2005–2006. The end of the sick-leave spell was the start of follow-up for both twins. The twins were followed up for reoccurring sick-leave, disability pension and unemployment (> 180 days in a year), until December 2012. Analyses were censored for disability pension, death, emigration and old-age pension. Cox proportional hazards models with time-varying covariates were used to calculate hazard ratios with 95% confidence intervals (CI). Results: Those with sick leave due to mental disorders had a 3.64 (CI: 3.24–4.08) times higher risk of reoccurring sick-leave within the first two years; after that, hazard ratios were attenua...

The Effect of Lower Transaction Costs on Social Security Disability Insurance Application Rates and Participation.

Abstract: Transaction costs pose significant barriers to participation in public programs. We analyze how Social Security Disability Insurance (SSDI) application behavior was affected by iClaim, a 2009 innovation that streamlined the online application process. We use a difference-in-differences design to compare application rates before and after 2009 across counties with varying degrees of access to high-speed internet. We estimate that counties with internet connectivity one standard-deviation above the mean experienced a 1.6 percent increase in SSDI applications, and a 2.8 percent increase in appeals after the reform. We estimate that the increase in applications due to iClaim can explain 15 percent of the overall increase in applications between 2008 and 2011. Higher exposure to the online application led to a slightly larger increase in SSDI awards, meaning there was a small but significant increase in the overall award rate. Application rates increased the most in rural areas, while appeals and awards had more significant increases in urban areas. These results suggest that the online application reduced transaction costs to applicants, and the lower costs improved the overall targeting efficiency of the application process.

Push and Pull: Disability Insurance, Regional Labor Markets, and Benefit Generosity in Canada and the United States

Abstract: Disability insurance take-up has expanded substantially in the past 20 years in the United States while shrinking in Canada We empirically assess these trends by measuring the strength of the “pus

Functional Assessment for Adults with Disabilities

Abstract: The U.S. Social Security Administration (SSA) provides disability benefits through the Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) programs. To receive SSDI or SSI disability benefits, an individual must meet the statutory definition of disability, which is “the inability to engage in any substantial gainful activity [SGA] by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.” SSA uses a five-step sequential process to determine whether an adult applicant meets this definition. Functional Assessment for Adults with Disabilities examines ways to collect information about an individual's physical and mental (cognitive and noncognitive) functional abilities relevant to work requirements. This report discusses the types of information that support findings of limitations in functional abilities relevant to work requirements, and provides findings and conclusions regarding the collection of information and assessment of functional abilities relevant to work requirements.

Great Recession and disability insurance in Spain

Abstract: In this paper, we exploit the strong incidence of the Great Recession in Spain to estimate the effect of economic conditions on participation in Disability Insurance (DI). Using individual panel data, we show that increases in the local unemployment rate are associated with a reduction in the individual probability to enter the DI program during the Great Recession in Spain. Using aggregate data on applications, we show that this procyclical behavior of DI awards comes from an increase in the proportion of applications that are denied. Thus, contrary to the previous literature that has extensively reported a countercyclical behavior of DI participation, our results provide new evidence that, in periods of extremely recessionary conditions, DI participation may turn procyclical.

The ‘compliant’, the ‘pacified’ and the ‘rebel’: experiences with Swiss disability insurance

Abstract: Switzerland’s social policies in the field of disability have been significantly reshaped over the last two decades by reducing the number of allowances awarded and by increasing the recourse to vo...

A disabling ideology: Challenging the neoliberal co-optation of independent living under the ndis

Abstract: On behalf of the disabled people's independent living movement (ILM), Brisenden (1998: 26) argues that 'the equality we are demanding is rooted in the concept of control; it stems from our desire to be individuals who can choose for themselves'. The rhetoric of choice and control has been central to the rollout of the National Disability Insurance Scheme (NDIS) in Australia, commencing in 2013. The National Disability Insurance Agency's (NDIAs) (2018[1]: 4) 'vision of the NDIS is to build a competitive and contestable marketplace that is flexible and responds to the choices and preferences of participants.' The NDIS seeks to deliver choice and control over disability services by operating as a cash for care scheme (Yeandle and Ungerson 1997: 2), by directly paying participants to act as consumers in a state-managed market for disability services.

Targeting disability insurance applications with screening

Abstract: We examine the targeting effects of increased scrutiny in the screening of Disability Insurance (DI) applications using exogenous variation in screening induced by a policy reform. The reform raised DI application costs and revealed more information about the true disability status of applicants at the point of the award decision. We use administrative data on DI claims and awards and merge these with other administrative data on hospitalization, mortality and labor market outcomes. Regression Discontinuity in Time (RDiT) regressions show substantial declines in DI application rates and changes in the composition of the pool of applicants. We find that the health of those who are not discouraged from applying is worse than those who are. This suggests that the pool of applicants becomes more deserving. At the same time, compared with those who did not apply under the old system of more lax screening, those who are discouraged from applying are in worse health, have substantially lower earnings and are more often unemployed. This indicates that there are spillovers of the DI reform to other social insurance programs. As we do not find additional screening effects on health at the point of the award decision, we conclude that changes in the health condition of the pool of awarded applicants are fully driven by self-screening of (potential) applicants.

The Relationship Between Occupational Requirements and SSDI Activity

Abstract: Evaluations of Social Security Disability Insurance (SSDI) applications are based not just on poor health, but in most cases consider the vocational factors of age, education and work experience to determine whether individuals can work. These criteria indicate that SSDI applicants must not only be in poor health, but in poor health that actually conflicts with the requirements of their occupation (and other occupations). Yet little is known about the relationship between SSDI activity and the ability to meet occupational requirements. This study devises a Health Mismatch Index, which is the share of workers in an occupation citing health-related difficulties in the Survey of Income and Program Participation that would prevent them from performing at least one requirement marked as essential for their occupation in the Occupational Requirement Survey. The results show that the most common difficulties in required abilities that result in health mismatch are lifting 25 lbs., standing for one hour, or hearing well in a conversational setting. Furthermore, occupations with a high Index have lower earnings, are more exposed to hazardous environments, and place less emphasis on high performance and problem-solving. Jobs with higher rates of workers who experience at least one difficulty with a job requirement have a higher share of workers receiving SSDI benefits within a 16-month period. Although the share of the population receiving SSDI increased from 1997 to 2010, the Index fell from 7.4 to 6.1 percent, suggesting that the increase could have been higher if not for the decline in health mismatch.

The ability of older workers with impairments to adapt to new jobs: changing the age criteria for social security disability insurance

Abstract: Many applications for Social Security Disability Insurance cannot be evaluated based on medical criteria alone. In specific cases, the current regulatory structure dictates that applicants who can no longer do past jobs are expected to adapt to new jobs up to the age of 55, but not after. As the proportion of these cases has grown and life expectancy among beneficiaries has increased, policymakers have considered whether expectations for adapting to new jobs above age 55 should be adjusted. Some recent reform proposals call for increasing the age cutoffs in the regulations. Although prior research predicts reduced program costs, the capacity of potentially affected applicants to continue working is unclear. Filling this gap, we evaluate the work capacity of applicants above age 55 using an instrumental variables strategy. Our estimates indicate that, for applicants on the margin of allowance, at most an additional 11.2 percent would work above the regulatory definition of meaningful employment (known as Substantial Gainful Activity) in the absence of Disability Insurance benefits. We explore the implications for adapting to new jobs above age 55 under the proposed policy regime.

Does the pension system’s income statement really matter? A proposal for an NDC scheme with disability and minimum pension benefits

Abstract: This paper develops a full accounting model for monitoring the solvency of a notional defined contribution (NDC) pension scheme with disability and minimum pension benefits. Using the annual report of the Swedish pension system as a benchmark (TSPS, 2018), we extend the “Swedish” actuarial balance developed by Perez-Salamero et al. (2017) by adding an income statement which fully explains the reasons behind the changes in the system’s solvency by type of benefit. In line with the reference model, assets and liabilities are measured at present value at each reporting date, and changes in present value are reported in each period as income or expenses and are included on the income statement. Our proposed model is a step forward because it, also, incorporates the changes for disability pensions, the value of change in the discount rate and the explicit recognition of non-contributory rights (NCRs) into the Income statement. This accounting framework integrates both contributory and social aspects of public pensions and discloses the real cost of the disability contingency and the redistribution through minimum pensions. The paper contains a numerical example consisting of an income statement for a (fictional) already-functioning system to illustrate the main differences between the Swedish NDC scheme and our model. Mathematical details are presented in a comprehensive technical appendix.

Evaluation of a Placement Coaching Program for Recipients of Disability Insurance Benefits in Switzerland

Abstract: Purpose During 2009‒2013 a pilot project was carried out in Zurich which aimed to increase the income of disability insurance (DI) benefit recipients in order to reduce their entitlement to DI benefits. The project consisted of placement coaching carried out by a private company that specialized in this field. It was exceptional with respect to three aspects: firstly, it did not include any formal training and/or medical aid; secondly, the coaches did not have the possibility of providing additional financial incentives or sanctioning lack of effort; and thirdly due to performance bonuses, the company not only had incentives to bring the participants into (higher paid) work, but also to keep them there for 52 weeks. This paper estimates the medium-run effects of the pilot project and assesses the net benefit from the Swiss social security system. Methods Different propensity score matching estimators are applied to administrative longitudinal data in order to construct suitable control groups. Results The estimates indicate a reduction in DI benefits and an increase in income even in the medium-run. A simple cost–benefit analysis suggests that the pilot project was a profitable investment for the social security system. Conclusion Given a healthy labor market, it seems possible to enhance the employment prospects of disabled persons with a relatively inexpensive intervention, which does not include any explicit investments in human capital.

Creative Destruction, Social Security Uptake and Union Networks

Abstract: Does the creative destruction induced by unions entail increased social security uptake? Creative destruction implies the closures of less productive workplaces, and if the regional benefits from this process is not large enough, the displacements caused by workplace closures cause increased social security uptake. In this paper we apply a shift-share approach and historical unionisation data from 1918 to study the impact of regional unionisation changes in Norway on regional social security uptake during the period 2003-2012. As regional unionisation increases, inflows to regional unemployment and disability decrease, but the outflow to retirement increases.

Labour Supply and Welfare Effects of Disability Insurance: A Survey

Abstract: This paper provides an overview of the labour supply disincentive and the insurance effect of public disability insurance (DI) programmes targeted to permanently disabled adults. It builds on previous survey papers to review the empirical findings on the direction and magnitude of the DI effects on labour market participation. It particularly focuses on the consequences of altering specific parameters of the DI schemes, such as benefit amount, screening stringency and return-to-work incentives. Finally, it surveys the recent literature investigating the level of insurance against work-limiting health impairments provided by DI programmes and the value of DI for beneficiaries. This literature is of particular relevance in a period in which many countries are facing the challenge of reforming DI schemes to guarantee their sustainability.

Solidarity in insuring financial risks of illness: a comparison of the impact of Dutch policy reforms in health insurance and disability insurance since the 1980s

Abstract: Solidarity is the “moral infrastructure” of social insurance arrangements that protect citizens against financial risks of illness: costs of medical care (health insurance) and loss of income (disability insurance). Although these arrangements have both met reforms, the effects of these reforms on the two forms of insurance have not yet been compared. This article presents a comparative analysis of these reforms’ impact on solidarity since the 1980s in the Netherlands. It develops an analytical framework, distinguishing coverage and financing dimensions, and concludes that the reforms affected several solidarity dimensions and that the effects were partly different in health insurance and disability insurance.

Unemployed or Disabled? Disability Screening and Labor Market Outcomes of Youths

Abstract: This paper examines the effect of being granted temporary disability insurance (TDI), as opposed to a non-health related benefit, on later labor market outcomes of youths who are seeking temporary income support from the state In Norway, there has been a development over time towards a more lenient screening to TDI, and this development has been more pronounced in some municipalities than in others Using local screening leniency as an instrument for TDI receipt, I find that being granted TDI benefits significantly reduces later labor market attachment of youths whose benefit receipt would differ according to their municipality of residence, and the year of entry to the benefit system

Hiring subsidies for people with a disability: do they work?

Abstract: This article evaluates the effectiveness of hiring subsidies targeted to people with disabilities. By exploiting the timing of implementation among different Spanish regions of a subsidy scheme implemented in Spain during the period 1990–2014, we employed a difference-in-differences approach to estimate the impact of the scheme on the probability of disability insurance (DI) beneficiaries of transiting to employment and on the propensity of individuals of entering the DI program. Our results show that the introduction of the subsidy scheme is in general ineffective at incentivizing transitions to employment, and in some cases it is associated with an increased propensity of transiting to DI. Furthermore, we show that an employment protection component incorporated into the subsidy scheme, consisting in the obligation for the employer to maintain the subsidized worker in employment, is associated with less transitions to permanent employment, more transitions to temporary employment and more transitions to DI, suggesting that these type of employment protection measures can have undesired effects for people with disabilities.