Moral Hazard and Claims Deterrence in Private Disability Insurance

David Autor, Mark Duggan and Jonathan Gruber

American Economic Journal: Applied Economics, 2014, vol. 6, issue 4, 110-41

Abstract: Exploiting within-firm, over-time variation in plan parameters for nearly 10,000 Long Term Disability (LTD) policies held by US employers, we present the first empirical analysis of the determinants of private LTD spells. We find that a shorter waiting period and a higher replacement rate increase the incidence of LTD spells. Sixty percent of the latter effect is due to the mechanical censoring of shorter spells, with the remainder due to the deterrence of spells that would have continued beyond the waiting period. Deterrence is driven primarily by a reduction in the incidence of shorter duration spells and less severe disabilities.

JEL-codes: D82 G22 J28 J32 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/app.6.4.110
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (42)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/app.6.4.110 (application/pdf)
http://www.aeaweb.org/aej/app/data/0604/2012-0206_data.zip (application/zip)
http://www.aeaweb.org/aej/app/ds/0604/2012-0206_ds.zip (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Moral Hazard and Claims Deterrence in Private Disability Insurance (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aejapp:v:6:y:2014:i:4:p:110-41

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Journal: Applied Economics is currently edited by Alexandre Mas

More articles in American Economic Journal: Applied Economics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().