Financial Work Incentives for Disability Benefit Recipients: Lessons from a Randomised Field Experiment

Monika Bütler (), Eva Deuchert (), Michael Lechner, Stefan Staubli and Petra Thiemann
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Eva Deuchert: University of St. Gallen

No 8715, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Disability insurance (DI) beneficiaries lose part of their benefits if their earnings exceed certain thresholds (“cash-cliffs”). This implicit taxation is considered the prime reason for low DI outflow. We analyse a conditional cash program that incentivises work related reductions of disability benefits in Switzerland. 4,000 randomly selected DI recipients receive an offer to claim up to CHF 72,000 (USD 71,000) if they expand work hours and reduce benefits. Initial reactions to the program announcement, measured by call-back rates, are modest; individuals at cash-cliffs react more frequently. By the end of the field phase, the take-up rate amounts to only 0.5%.

Keywords: financial incentive; field experiment; disability insurance; return-to-work (search for similar items in EconPapers)
JEL-codes: C93 D04 H55 J14 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2014-12
New Economics Papers: this item is included in nep-eur, nep-exp, nep-hrm, nep-ias and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published - revised version published in: IZA Journal of Labor Policy, 2015, 4:18

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Related works:
Journal Article: Financial work incentives for disability benefit recipients: lessons from a randomised field experiment (2015)
Working Paper: Financial work incentives for disability benefit recipients: Lessons from a randomized field experiment (2014)
Working Paper: Financial work incentives for disability benefit recipients: Lessons from a randomized field experiment (2014)
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