Occupational Hazards and Social Disability Insurance

Amanda Michaud and David Wiczer

Department of Economics Working Papers from Stony Brook University, Department of Economics

Abstract: Using retrospective data, we introduce evidence that occupational exposure significantly affects disability risk. Incorporating this into a general equilibrium model, social disability insurance (SDI) affects welfare through (i) the classic, risk-sharing channel and (ii) a new channel of occupational reallocation. Both channels can increase welfare, but at the optimal SDI they are at odds. Welfare gains from additional risk-sharing are reduced by overly incentivizing workers to choose risky occupations. In a calibration, optimal SDI increases welfare by 2.3% relative to actuarially fair insurance, mostly due to risk sharing.

Date: 2017
New Economics Papers: this item is included in nep-cta, nep-dge, nep-ias and nep-rmg
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Citations: View citations in EconPapers (2)

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http://www.stonybrook.edu/commcms/economics/research/papers/2017/OccHaz_1711.pdf (application/pdf)

Related works:
Journal Article: Occupational hazards and social disability insurance (2018)
Working Paper: Occupational Hazards and Social Disability Insurance (2017)
Working Paper: Occupational hazards and social disability insurance (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:nys:sunysb:17-11

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