Disability shocks and consumption behavior

Luigi Pistaferri and Hamish Low

No 323, 2007 Meeting Papers from Society for Economic Dynamics

Abstract: We use longitudinal data on consumption, disability status, disability insurance recipiency, and earnings to measure the welfare loss of disability shocks. We decompose earnings risk into shocks due to the emergency of disability and shocks to general productivity. We then examine the issue of optimality of the DI program, accounting for moral hazard issues having to do with healthy people applying for DI benefits in response to permanent negative shocks to their general productivity.

Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed007:323

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More papers in 2007 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
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