Designing Disability Insurance Reforms: Tightening Eligibility Rules or Reducing Benefits?

Andreas Haller, Stefan Staubli and Josef Zweimüller ()

Econometrica, 2024, vol. 92, issue 1, 79-110

Abstract: This paper develops a sufficient statistics framework for analyzing the welfare effects of disability insurance (DI). We derive social‐optimality conditions for the two main DI policy parameters: (i) eligibility rules and (ii) benefit levels. Applying this framework to two restrictive DI reforms in Austria, we find that tighter DI eligibility rules triggered higher fiscal cost savings and lower insurance losses. Hence, tighter DI eligibility rules dominate DI benefit reductions in scaling back the Austrian DI system.

Date: 2024
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https://doi.org/10.3982/ECTA19021

Related works:
Working Paper: Designing Disability Insurance Reforms: Tightening Eligibility Rules or Reducing Benefits? (2020)
Working Paper: Designing Disability Insurance Reforms: Tightening Eligibility Rules or Reducing Benefits? (2020)
Working Paper: Designing Disability Insurance Reforms: Tightening Eligibility Rules or Reducing Benefits (2020)
Working Paper: Designing Disability Insurance Reforms: Tightening Eligibility Rules or Reducing Benefits? (2020)
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