Disability Insurance and the Effects of Return-to-work Policies

Chiara Dal Bianco ()

Review of Economic Dynamics, 2023, vol. 49, 351-373

Abstract: I provide a quantitative assessment of the labor market and welfare effects of return-to-work policies targeted at disability insurance (DI) recipients. I do so by estimating a life-cycle model in which individuals with different health evolving over time choose consumption, labor supply, and DI application. I find that a wage subsidy incentivizing return to work is welfare improving, and the willingness to pay for such reform is increasing in sickness and decreasing in wealth. This policy increases labor force participation of DI beneficiaries by 3.6 percentage points, and decreases the DI rate by 4.6 percentage points. A policy mandating a 10% yearly eligibility reassessment would decrease the welfare of individuals in bad health and poor economic condition, and force about 30% of the beneficiaries to exit the program, 56% of whom would return to work. (Copyright: Elsevier)

Keywords: disability insurance; labor supply; older workers; health; return-to-work policies (search for similar items in EconPapers)
JEL-codes: I1 J14 J26 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://dx.doi.org/10.1016/j.red.2022.11.001
Access to full texts is restricted to ScienceDirect subscribers and institutional members. See https://www.sciencedirect.com/ for details.

Related works:
Software Item: Code and data files for "Disability Insurance and the Effects of Return-to-work Policies" (2022)
Working Paper: Disability Insurance and the Effects of Return-to-Work Policies (2022)
Working Paper: Online Appendix to "Disability Insurance and the Effects of Return-to-work Policies" (2022)
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:red:issued:20-49

Ordering information: This journal article can be ordered from
https://www.economic ... ription-information/

DOI: 10.1016/j.red.2022.11.001

Access Statistics for this article

Review of Economic Dynamics is currently edited by Loukas Karabarbounis

More articles in Review of Economic Dynamics from Elsevier for the Society for Economic Dynamics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().