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

Kevin Milligan and Tammy Schirle

No 23405, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Disability insurance take-up has expanded substantially in the past twenty years in the United States while shrinking in Canada. We empirically assess these trends by measuring the strength of the ‘push’ from weak labor markets versus the ‘pull’ of more generous benefits. Using an instrumental variables strategy comparing benefit changes across country, age, and year, we find that both benefits and regional wages matter. Simulations suggest that the upswing in disability insurance take-up in the United States would be reversed, dropping the caseload by one third, if benefits and wages had followed the growth path observed in Canada.

JEL-codes: H53 I38 J21 (search for similar items in EconPapers)
Date: 2017-05
New Economics Papers: this item is included in nep-ias, nep-lma and nep-pbe
Note: PE
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Published as Push and Pull: Disability Insurance, Regional Labor Markets, and Benefit Generosity in Canada and the United States , Kevin S. Milligan, Tammy Schirle. in Small Differences II: Public Policies in Canada and the United States , Oreopoulos and Card. 2019
Published as Kevin Milligan & Tammy Schirle, 2019. "Push and Pull: Disability Insurance, Regional Labor Markets, and Benefit Generosity in Canada and the United States," Journal of Labor Economics, vol 37(S2), pages S289-S323.

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Journal Article: Push and Pull: Disability Insurance, Regional Labor Markets, and Benefit Generosity in Canada and the United States (2019)
Chapter: Push and Pull: Disability Insurance, Regional Labor Markets, and Benefit Generosity in Canada and the United States (2016)
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