asset accumulation and labor force participation of disability insurance applicants abstract this paper provides empirical evidence of the existence of forward looking asset accumulation behavior among disability insurance applicants previously examined only in the theoretical literature using panel data from the rand health and retirement study i show that rejected applicants for social security disability insurance ssdi possess significantly more assets than accepted applicants immediately prior to application and exhibit lower attachment to the labor force these empirical results are consistent with the theoretical prediction in diamond and mirrlees 1978 and golosov and tsyvinski 2006 that certain individuals with high unwillingness to work maximize utility by planning in advance for their future disability insurance application because the existing empirical literature on disability insurance does not account for this intertemporal channel it may underestimate the total work disincentive effect of ssdi

government old age support and labor supply evidence from the old age assistance program many major government programs transfer resources to older people and implicitly or explicitly tax their labor in this paper we shed new light on the labor supply and welfare effects of such programs by investigating the old age assistance program oaa a means tested and state administered pension program created by the social security act of 1935 using newly available census data on the entire us population in 1940 we exploit the large differences in oaa programs across states to estimate the labor supply effects of oaa our estimates imply that oaa reduced the labor force participation rate among men aged 65 74 by 5 8 percentage points nearly half of its 1930 40 decline however both reduced form evidence and an estimated structural model of labor supply imply that the welfare cost to recipients of the high tax rates implicit in oaa s earnings test were small the evidence also suggests that social security could account for at least half of the large decline in late life work from 1940 to 1960

labor market effects of hawaii s mandatory employer provided health insurance the author analyzes how mandatory employer provision of health insurance in hawaii which became law in 1974 affected workers wages employment and insurance coverage between 1970 and 1990 the

a natural experiment on sick pay cuts sickness absence and labor costs abstract this study estimates the reform effects of a reduction in statutory sick pay levels on sickness absence behavior and labor costs german federal law reduced the legal obligation of german employers to provide 100 continued wage pay for up to six weeks per sickness episode in 1996 statutory sick pay was decreased to 80 of foregone gross wages within the reform s target group private sector employees this measure increased the proportion of employees having zero days of absence between 6 and 8 quantile regression estimates indicate that employees with up to 5 5 annual absence days reduced their days of absence by about 12 extended analyses suggest that in industries that enforced the cut behavioral effects were about twice as large we show that the direct labor cost savings effect stemming from the cut in replacement levels clearly exceeds the indirect effect due to the decrease in absenteeism our calculations about the total decrease in labor costs are very much in line with official data which suggest that total employer provided sick pay decreased by 6 7 or 1 7 billion per year

claim timing and ex post adverse selection many health care treatments are not urgent and may be delayed if patients so choose because insurance coverage is typically determined by the treatment date individuals may have incentives to strategically delay treatments to minimize out of pocket costs the strategic delay of treatment a particular form of moral hazard can be an important source of subsequent adverse selection in which ex ante identical individuals select insurance coverage based on their differing accumulation of previously delayed treatments this article investigates these forces empirically in the context of the missing market for dental insurance using rich claim level data my analysis reveals that approximately 40 of individuals strategically delay dental treatments when incentivized to do so and this flexibility in delaying treatment can explain why the market for dental insurance has largely unraveled more generally the counterfactual analysis suggests features such as open enrolment periods and contracting on pre existing conditions may be helpful tools in overcoming adverse selection in insurance contexts where the timing of uncertainty is not contractible

dynamics of health and labor market risks while there is little doubt that the probability of poor health increases with age and that less healthy people face a more difficult situation on the labor market the precise relationship between facing the risks of health deterioration and labor market instability is not well understood using 12 years of data from the german socio economic panel we study the nature of the relationship between poor health and non employment on a sample of german men aged 30 59 we propose a joint model of health and labor market risks which identifies the mechanism through which poor health contributes to the probability of being jobless and vice versa we find an important role of unobserved heterogeneity and evidence for correlation in the unobservable characteristics determining the two processes the results also show strong persistence in the dynamics of health and labor market risks

how financial incentives induce disability insurance recipients to return to work using a local randomized experiment that arises from a sharp discontinuity in disability insurance di policy in norway we provide transparent and credible identification of how financial incentives induce di recipients to return to work we find that many di recipients have considerable capacity to work that can be effectively induced by providing financial work incentives we further show that providing work incentives to di recipients may both increase their disposable income and reduce program costs our findings also suggest that targeted policies may be the most effective in encouraging di recipients to return to work

the retirement incentive effects of canada s income security programs canada has a large income security system for retirement that provides significant and widely varying disincentives to work at older ages we provide an empirical analysis of the retirement incentives of the canadian income security system using a new administrative database we find that the work disincentives inherent in the canadian income security system have significant impacts on retirement this suggests that program reform can play a role in responses to fiscal pressures we also demonstrate the importance of controlling for lifetime earnings in retirement models specifications without these controls overestimate the effects of the income security

family welfare cultures strong intergenerational correlations in various types of welfare use have fuelled a long standing debate over whether welfare receipt in one generation causes welfare participation in the next generation some claim a causal relationship in welfare receipt across generations has created a culture in which welfare use reinforces itself through the family others argue the determinants of poverty or poor health are correlated across generations so that children s welfare participation is associated with but not caused by parental welfare receipt however there is little empirical evidence to sort out these claims in this paper we investigate the existence and importance of family welfare cultures in the context of norway s disability insurance di system to overcome the challenge of correlated unobservables across generations we take advantage of random assignment of judges to di applicants whose cases are initially denied some appeal judges are systematically more lenient which leads to random variation in the probability a parent will be allowed di using this exogenous variation we find strong evidence that welfare receipt in one generation causes welfare participation in the next generation when a parent is allowed di their adult child s participation over the next five years increases by 6 percentage points this effect grows over time rising to 12 percentage points after ten years while these findings are specific to our setting they serve to highlight that welfare reforms can have long lasting effects on program participation since any original effect on the current generation could be reinforced by changing the participation behavior of their children as well the detailed nature of our data allows us to compare the intergenerational transmission with spillover effects in other networks and to explore mechanisms our findings point to a special link between parents and their children with little impact due to close neighbors di participation we find suggestive evidence that what may change as a result of a parent being allowed di is their children s beliefs about the efficacy of trying to get on to the di program or their attitudes about di participation and its stigma

prices and protocols in public health care this article addresses the problem of how to determine the optimal allocation of public expenditure in the health sector the first part poses the question how should the set of services provided in the public health care system and the fees charged for them is chosen to maximize the health status of the population with a fixed budget first the findings show that policy reform should take into account the response of the private sector substituting for a reasonably well functioning private sector is not as valuable as providing services the private sector cannot second the assumptions needed to justify the cost effectiveness of medical interventions as a criterion for setting priorities are so restrictive as to make this method usable in few if any circumstances third prices for any one service should be set to balance the conflicting goals of encouraging its use and of conserving the budget for more effective services the second part broadens the objective of policy to cover the standard welfare economics concerns of utility and market failure the latter being extensive in the health sector it reexamines welfare maximization rules to show that only the market failure components of shadow prices are needed to calculate the welfare gains from public investments

alcohol availability prenatal conditions and long term economic outcomes this study examines how a policy that sharply increased alcohol availability during 8 5 months affected the labor productivity of those exposed to it in utero compared to the surrounding cohorts the prenatally exposed children have substantially worse labor market and educational outcomes and lower cognitive and noncognitive ability effects on earnings are found throughout the distribution but are largest below the median males are more affected than females consistent with growing evidence that boys are less resilient to early environmental insults the long term effects seem primarily driven by changes in prenatal health rather than changes in the childhood environment

poverty in dictator games awakening solidarity abstract this paper investigates the effect of recipient poverty and medicines on dictator game giving we develop a new design with three variants 1 subjects do not know they are participating in an experiment 2 dictators receive three 5 bills instead of 15 coins 3 three recipients are used instead of one we performed three different treatments regarding the information about recipients i no info condition ii poverty dictators were informed that their recipients were poor iii medicines donations were given in the form of medicines instead of money we found that 46 percent of the subjects gave the full endowment in the poverty treatment while in the medicines treatment this percentage increased to 72 percent

fast food consumption and the ban on advertising targeting children the quebec experience abstract amid growing concerns about childhood obesity and the associated health risks several countries are considering banning fast food advertising targeting children in this article the authors study the effect of such a ban in the canadian province of quebec using household expenditure survey data from 1984 to 1992 authors examine whether expenditure on fast food is lower in those groups affected by the ban than in those that are not the authors use a triple difference indifference methodology by appropriately defining treatment and control groups and find that the ban s effectiveness is not a result of the decrease in fast food expenditures per week but rather of the decrease in purchase propensity by 13 per week overall the authors estimate that the ban reduced fast food consumption by us 88 million per year the study suggests that advertising bans can be effective provided media markets do not overlap

social interaction effects in disability pension participation evidence from plant downsizing we estimate the magnitude of social interaction effects in disability pension participation among older workers in norway the problem of omitted variable bias is addressed using the exposure of an individual s neighbors to plant downsizing events as an instrument for the disability entry rate among the individual s previously employed neighbors our instrumental variable iv estimates suggest that an increase of one percentage point in the participation rate of previously employed neighbors increased the subsequent four year entry rate of older workers by about 0 4 percentage points numerous robustness and specification tests appear to support the validity of the identifying assumption in our iv strategy

emphasising the problem or the solution in charitable fundraising for international development abstractwe conduct a laboratory experiment to test the effect on charitable donations to international development ngos ingos of emphasising current deprivation in a developing country versus emphasising the potential good a donation can achieve using a double blind dictator experiment with earned endowments we find that varying the information emphasis has no significant effect on total donations nor on the probability of donating we find suggestive evidence that an emphasis on current deprivation may raise the variance of donations and thus the size of donations conditional on donating but the effect is not significant in hurdle models that explicitly recognise this

the decline in male labor force participation comment in an article in thisjournal parsons 1980a analyzes the doubling in the rate of nonparticipation in the labor force of older men since 1946 using cross sectional data from the national longitudinal survey parnes et al 1970 in an index function model of the labor force participation decision he tests the assertion that the withdrawal of older males is attributable to the rapid expansion of alternatives to work provided by the social security disability insurance ssdi program he reports an elasticity of nonparticipation with respect to the replacement rate of ssdi benefits of 631 and concludes that the recent decline in labor force participation can be largely explained by the increased generosity of social welfare transfers particularly social security disability payments p 130 the magnitude of parsons s estimate and its impact on the public debate over disability transfer policy require careful scrutiny of its basis in section i we describe parsons s econometric model and construction of variables in section ii we provide a critique in section iii we test the robustness of parsons s elasticity estimate by presenting alternative estimates based on corrections and extensions of his basic model section iv concludes

the employment effects of low wage subsidies abstract low wage subsidies are often proposed as a solution to the unemployment problem among the low skilled but the empirical evidence on their effects is still scarce this paper examines the employment effects of a finnish payroll tax subsidy scheme which is targeted at the employers of older full time low wage workers the system s clear eligibility criteria open up an opportunity for a reliable estimation of the causal impacts of the subsidy scheme our results indicate that the subsidy system had no effect on the employment rate or wages of the eligible groups but it increased slightly working hours among those already at work

the elusive wage benefit trade off the case of employer provided health insurance this study shows that standard regressions estimated to measure a trade off between wages and health insurance are misspecified by insufficiently accounting for establishment and firm size an interactive size corrected specification is more likely to reveal a trade off furthermore because insurance decisions are typically made by firms and wages set by establishments the insurance constraint on establishments in multi establishment firms weakens the trade off we use model generated data to show that both factors contribute to the failure in previous research to identify a trade off and data from a cross section of northern californian establishments to test for a trade off in multi establishment and single establishment firms

parental responses to child support obligations evidence from administrative data abstract we study parental responses to child support obligations using rich administrative data from denmark and variation in the child support formula we estimate that a 1000 dkk 160 increase in a father s obligation is associated with a 273 dkk 45 increase in his payment a higher obligation reduces father child co residence pointing to substitution between financial and non pecuniary investments further obligations increase post separation fertility among remarried fathers but have no impacts on maternal fertility or either parent s labor supply our findings suggest that government efforts to increase child investments through mandates on parents can be complicated by their behavioral responses to them

does privatisation of vocational rehabilitation improve labour market opportunities evidence from a field experiment in sweden this paper analyses if privatisation of vocational rehabilitation can improve labour market opportunities for individuals on long term sickness absence we use a field experiment performed by the p

the rise in the disability rolls and the decline in unemployment between 1984 and 2001 the share of nonelderly adults receiving social security disability insurance income di rose by 60 percent to 5 3 million beneficiaries rapid program growth despite improving aggregate health appears to be explained by reduced screening stringency declining demand for less skilled workers and an unforeseen increase in the earnings replacement rate we estimate that the sum of these forces doubled the labor force exit propensity of displaced high school dropouts after 1984 lowering measured u s unemployment by one half a percentage point steady state calculations augur a further 40 percent increase in the rate of di receipt

disability insurance and unemployment insurance as substitute pathways in this article we estimate the degree of substitution between enrolment into disability insurance di and unemployment insurance ui in the netherlands starting in the 1990s many policy measures aimed at reducing di enrolment and increase labour force participation we quantify whether these policy measures have led to a reduction in hidden unemployment in di a side effect of the reforms may be increased pressure on ui therefore we simultaneously estimate reverse substitution that is hidden disability in ui to this end we employ a sample of firms in the dutch avo database from the period 1993 to 2002 using instrumental variables in a bivariate tobit specification we identify the hidden components in both respective schemes the estimation results indicate that about 3 of all dismissals took place through di which implies that about one quarter of the di enrolments observed in our sample in fact consists of hidden unemployment we find no evidence for reverse substitution of disabled perso

disability insurance benefits and labor supply a critical input for assessing the optimal size of disability insurance programs is the elasticity of labor force participation with respect to the generosity of benefits unfortunately this parameter has been difficult to estimate in the context of the u s disability insurance program since all workers face an identical benefits schedule i surmount this problem by studying the experience of canada which operates two distinct disability insurance programs for quebec and for the rest of canada the latter program raised its benefits by 36 percent in january 1987 whereas benefits in quebec were constant i find a sizable labor supply response to the policy change my central estimates imply an elasticity of labor force nonparticipation with respect to disability insurance benefits of 0 28 0 36

early retirement policy in the presence of competing exit pathways evidence from pension reforms in finland i study the effects of changes in the eligibility age thresholds for unemployment and part time pensions and the effect of tightening medical criteria for disability pension eligibility in finland particular attention is paid to the spillover effects of the pension reforms these pension reforms jointly raised the average age at which workers leave employment by 3 9 months mainly due to a sharp drop in disability pension enrolment from age 58 upwards and a lower incidence of unemployment at younger ages these effects are heterogeneous much of which is attributable to the spillover effects that vary across individuals

moral hazard and sickness insurance abstract we study if the replacement level in the swedish national sickness insurance which replaces foregone earnings due to temporary illnesses affects work absence behavior we use micro data and estimate the effects of a major reform whereby the replacement level during the first 90 days in each absence spell was reduced on work attendance to separate out the effect of the reform from any trend in work absence we distinguish between the implications on the incidence of work absence i e the frequency of spells and the duration of the spells we also use a regression discontinuity approach to estimate the effects on the prevalence of work absence finally we estimate elasticities with respect to the replacement level in the sickness insurance

risk and farm operator labour supply this study uses a large increase in us federal crop insurance subsidies as a natural experiment to identify the importance of risk for farm operator labour supply subsidy increases induced greater crop insurance coverage which in turn reduced farmers financial risks crop insurance participation data are merged with farm level census of agriculture data from 1992 and 1997 to compare how individuals off farm labour supply changed in response to the policy induced change in insurance coverage the empirical approach controls for unobserved heterogeneity and accounts for the censored nature of the data it is found that greater insurance coverage reduces the off farm labour supply of operators who produced at least 100 000 of output and increased the labour supply of small farm operators who produced less than 25 000 of output

the health and earnings of rejected disability insurance applicants applicants for social security disability benefits who fail to pass the medical screening form a natural control group for beneficiaries data drawn from the 1972 and 1978 surveys of the disabled done for the social security administration show that fewer than 50 percent of rejected male applicants work typical earnings of those that do are less than 59 percent of median earnings for other men their age these data cast doubt on recent econometric work that suggests that the disincentive effects of the social security disability program have been substantial copyright 1989 by american economic association

disability earnings income and consumption using longitudinal data for the period 1968 2005 for a sample of male household heads we determine the prevalence of disability during the working years and examine how the extent of disability affects a range of outcomes including earnings income and consumption we have seven main findings first disability rates are high we divide the disabled along two dimensions based on the persistence and severity of their work limiting condition we estimate that a person reaching age 56 has a 53 percent chance of having been disabled at least once during his working years and a 19 percent chance that he has begun a chronic and severe disability second the economic consequences of disability are frequently profound ten years after disability onset a person with a chronic and severe disability on average experiences a 68 percent decline in earnings a 32 percent decline in after tax income a 22 percent decline in food and housing consumption and a 21 percent decline in food consumption third the various economic consequences differ sharply across disability groups the outcome declines for those with a chronic and severe disability are often more than twice as large as those for the average disabled fourth our findings show the partial and incomplete roles that individual savings family support and social insurance play in reducing the consumption drop that follows disability only about half of this most disabled group reports receiving social security disability insurance or supplemental security income fifth we find a noticeable fall in earnings and income prior to the onset of a reported disability consumption also falls somewhat suggesting that future disability is partially but incompletely predictable in the short run sixth time use and detailed consumption data further indicate that disability is associated with a decline in well being seventh the quantities we have estimated combined with elasticities from the literature allow us to examine the optimality of current compensation for the disabled we find that the current compensation for our most disabled group appears to be lower than is optimal

a poverty oriented cost benefit approach to the analysis of development projects abstract this essay presents a form of cost benefit analysis where benefits are defined in terms of contributions to basic human capabilities this capabilities approach to project analysis is contrasted with the us agency for international development s logical framework approach the world bank s economic cost benefit approach and distributionally sensitive economic cost benefit analysis i argue that international development agencies concessional resource transfers could contribute more to the well being of the world s poor if guided by this cost benefit approach than they do under current arrangements the notion of capabilities as fundamental requirements for well being has been developed by amartya sen

disability insurance benefits and labor supply some additional evidence this article examines the effects of a change in the canada quebec pension plan c qpp disability benefits on the labor supply of older canadian workers i obtain my estimates by exploiting a large increase in benefits that only occurred in the qpp program which only operates in quebec while benefits in the cpp program which operates in the rest of canada were unaffected unlike the existing estimates from the united states as well as earlier canadian obtained by gruber i find that disability benefits are not associated with a large increase in the nonparticipation of older men

disability insurance rejection rates and the labor supply of older workers abstract we investigate the effects of trying to mitigate moral hazard in the disability insurance di program by raising the stringency of the screening process for applicants we do so by studying a dramatic increase in rejection rates for the di program in the late 1970s which varied substantially across the us states we find that each 10 rise in denial rates led to a statistically significant 2 8 fall in labor force non participation among 45 64 year old males we also find that the denial rate increases effectively targeted their incentive effects to more able individuals according to an anthropometric measure of disability

the incidence of mandated maternity benefits i consider the labor market effects of mandates which raise the costs of employing a demographically identifiable group the efficiency of these policies will be largely dependent on the extent to which their costs are shifted to group specific wages i study several state and federal mandates which stipulated that childbirth be covered comprehensively in health insurance plans raising the relative cost of insuring women of childbearing age i find substantial shifting of the costs of these mandates to the wages of the targeted group correspondingly i find little effect on total labor input for that group jel 118 j32 h51 in an era of tight fiscal budget constraints mandating employer provision of workplace benefits to employees is an attractive means for a government to finance its policy agenda consequently in recent years there has been a growth of interest in mandated benefits as a tool of social policy for example the centerpiece of president bill clinton s health care proposal is mandated employer provision of health insurance and more than 20 states have man

disability policy and the labor market evidence from a natural experiment in canada 1998 2006 abstract this paper examines the effect of changes in two key parameters in disability policy a the earnings that disability insurance beneficiaries are allowed to earn without losing their disability benefits and b automatic reinstatement where beneficiaries can have benefits reinstated without re application and re testing for disability determination we examine the effects of these policy changes on the probability of employment for disability beneficiaries as well as the flows onto and off the disability rolls we obtain our estimates using a difference in difference strategy that exploits the unique structure of disability insurance arrangements in canada namely that there are two programs one that covers individuals in the province of quebec and one in the rest of canada our preferred estimates indicate that the introduction of the allowable earnings change increased the propensity of disability beneficiaries to work but we do not find that the earnings exemption had an effect on the flows on to or off the disability rolls in contrast we find that the introduction of the automatic reinstatement policy did not have an effect on any of the outcomes we examine

labor force participation and monetary policy in the wake of the great recession in this paper we provide compelling evidence that cyclical factors account for the bulk of the post 2007 decline in the u s labor force participation rate we then proceed to formulate a stylized new keynesian model in which labor force participation is essentially acyclical during normal times that is in response to small or transitory shocks but drops markedly in the wake of a large and persistent aggregate demand shock finally we show that these considerations can have potentially crucial implications for the design of monetary policy especially under circumstances in which adjustments to the short term interest rate are constrained by the zero lower bound

income and substitution effects of a disability insurance reform abstract disability insurance di systems are widely criticized for their inherent work disincentives this paper evaluates the effects of a swiss di reform that aims to lower di benefits for a group of existing di beneficiaries and introduces an additional level to the di benefit schedule the reform has only modest effects on earnings and employment but increases the disability degree of those threatened by a di benefit decline we estimate bounds on the income and substitution effects by employing the principal stratification framework the income effect is quantitatively important whereas the substitution effect is smaller and has bounds that include zero the evidence suggests that caseworkers helped the insured with low labor market attachment to maintain a full di benefit

assessing the effect of payroll taxes on formal employment the case of the 2012 tax reform in colombia in 2013 colombia implemented a tax reform that reduced payroll taxes by a total of 13 5 percentage points of wages this paper evaluates the effects of this component of the 2012 colombian tax reform on firms formal employment and average wages we construct a panel of firms based on their employees administrative records to account for the endogeneity of the treatment we use an instrumental variables technique that exploits the exogenous variation from the decisions of firms that are similar to each other in several dimensions but belong to different economic sectors based on our preferred specification we estimate a positive and significant increase in formal employment as a result of the implementation of the reform of approximately 213 000 jobs in existing pre reform firms in the long run these effects will increase to more than 600 000 jobs the effect of the reform on the average wages paid by firms was also found to be positive for some sizes of firms but the overall effect in the short run is rather small

the incidence of payroll taxation evidence from chile i provide new evidence on the incidence of payroll taxation by examining the experience of chile before and after the privatization of its social security system this policy change led to a sharp exogenous reduction in the payroll tax burden on chilean firms on average payroll tax rates fell by 25 over 6 years using data from a census of manufacturing firms i estimate that the incidence of payroll taxation is fully on wages with no effect on employment this finding is robust to a variety of empirical approaches to the problem of measurement error in firm level measures of taxes worker

raising taxes through equalization a simple theory suggests that a common form of federal horizontal equalization grants should cause subnational governments to levy higher tax rates distorting local tax bases and so increasing federal transfers to test this i examine canadian provincial tax policies in the 1972 2002 period consistent with the theory provinces respond to expansions of equalization transfers by increasing their own tax rates i estimate that on average tax rates in grant receiving provinces were substantially and significantly higher as a consequence of the transfer formula jel classification h21 une theorie simple suggere qu une forme usuelle d octrois federaux de perequation horizontale devrait entrainer les gouvernements sub nationaux a imposer de plus hauts taux d imposition modifiant ainsi les bases de fiscalite locale et ce faisant accroissant les transferts federaux pour mettre au test cette hypothese on examine les politiques fiscales des provinces canadiennes pour la periode entre 1972 et 2002 d une maniere qui semble supporter l hypothese les provinces ont repondu a un accroissement des transferts de perequation en accroissant leur propre taux d imposition on estime que les taux moyens d imposition dans les provinces qui recoivent des transferts sont plus eleves de maniere substantielle et significative en raison de la formule de transferts

does disability insurance receipt discourage work using examiner assignment to estimate causal effects of ssdi receipt abstract we present the first causal estimates of the effect of social security disability insurance benefit receipt on labor supply using all program applicants we use administrative data to matc

effects of microcredit and other loans on female empowerment in bangladesh the borrower s gender influences intra household resource allocation this article examines microcredit s effectiveness in empowering women borrowers in rural bangladesh it does so by examining how gender specific borrowing activities influence household expenditures which are either specifically of interest to men or women and by examining the effects of all loans rather than only those provided by microcredit organizations the article uses a quasi experimental design to identify the effects of borrowing by men and women by using an original combination of panel data and instrumental variables on subsamples of the surveyed population it finds that the borrower s gender affects how households allocate their resources to different expenditure items and assets that are valued differently by men and women in all the findings suggest that providing greater credit access to women may improve their household bargaining positions

disability transfers self reported health and the labor force attachment of older men evidence from the historical record we use trends in self reported disability to gauge the impact of the growth of disability transfer programs on the labor force attachment of older working aged men our tabulations suggest that between 1949 and 1987 about half of the 4 9 percentage point drop in the labor force participation of men aged 45 54 and between one quarter and one third of the 19 9 point drop among men aged 55 64 represented a movement of men out of the labor force and onto the rolls of transfer programs targeted at the disabled since the expansion of transfer programs represents only one of the forces behind this movement these figures represent upper bounds on the impact of such programs on work force attachment

heterogeneity and the effect of mental health parity mandates on the labor market health insurance benefit mandates are believed to have adverse effects on the labor market but efforts to document such effects for mental health parity mandates have had limited success i show that one reason for this failure is that the association between parity mandates and labor market outcomes vary with mental distress accounting for this heterogeneity i find adverse labor market effects for non distressed individuals but favorable effects for moderately distressed individuals and individuals with a moderately distressed family member on net i conclude that the mandates are welfare increasing for moderately distressed workers and their families but may be welfare decreasing for non distressed individuals

the economic implications of disability insurance in canada the article empirically estimates the effects of disability pensions provided under the canada quebec pension plans on the labor force participation rates of males aged 45 64 years two data sets are used one consists of pooled cross section annual time series data by province for the years 1975 83 the other consists of observations as of 1985 on 651 males in the specified age group naive estimation results from both sets of data suggest a large negative effect of pension income in the case of the micro data this effect becomes small and statistically nonsignificant when more sophisticated estimation methods are used

when minority labor migrants meet the welfare state life cycle employment of minority labor migrants who entered norway in the early 1970s diverges from that of natives immigrant employment was nearly complete during early years but declined to 50 by the year 2000 compared to 87 for a native comparison group we find that immigrant employment is particularly sensitive to the business cycle and that economic downturns of the 1980s and 1990s accelerated their labor market exit we trace part of the decline to migrants being overrepresented in shrinking industries but we also identify welfare disincentives that contribute to poor life cycle employment performance of immigrants with many dependent family members

aching to retire the rise in the full retirement age and its impact on the social security disability rolls abstract the social security amendments of 1983 reduced the generosity of social security retired worker benefits in the u s by increasing the program s full retirement age from 65 to 67 and increasing the penalty for claiming benefits at the early retirement age of 62 these changes were phased in gradually so that individuals born in or before 1937 were unaffected and those born in 1960 or later were fully affected no corresponding changes were made to the program s disabled worker benefits and thus the relative generosity of social security disability insurance ssdi benefits increased in this paper we investigate the effect of the amendments on ssdi enrollment by exploiting variation across birth cohorts in the policy induced reduction in the present value of retired worker benefits our findings indicate that the amendments significantly increased ssdi enrollment since 1983 with an additional 0 6 of men and 0 9 of women between the ages of 45 and 64 receiving ssdi benefits in 2005 as a result of the changes our results further indicate that these effects will continue to increase during the next two decades as those fully exposed to the reduction in retirement benefit generosity reach their fifties and early sixties

the dark side of sunshine regulatory oversight and status quo bias abstract as the mortgage foreclosure crisis accelerated in the u s in the late 2000s state level policymakers implemented measures designed to protect consumers and stem the tide of foreclosures one form of policy was simply to require lenders to report on foreclosure prevention activities such policies represented a shift from the status quo for mortgage loan servicing firms operating under incomplete information doing nothing with non paying loans while waiting for more information to be revealed to either foreclosing on the borrower or offering the borrower a modification of loan terms using a difference in difference in differences empirical strategy we exploit one policy implemented in maryland for a subset of mortgage servicers and find evidence that firms perform more loan modifications as well as file more foreclosures increasing foreclosure filings was contrary to the intent of the policy suggesting that policymakers should be aware of how firms exhibit systematic biases much like individuals

a kink that makes you sick the effect of sick pay on absence we exploit a regression kink design to estimate the elasticity of the duration of sickness absence with respect to replacement rate elasticity is a central parameter in defining the optimal social insurance scheme compensating for lost earnings due to sickness we use comprehensive administrative data and a kink in the policy rule near the median earnings we find a statistically significant estimate of the elasticity of the order of one

do payroll tax breaks stimulate formality evidence from colombia s reform alternative work arrangements have grown rapidly around the world in latin america these alternative work arrangements have long been part of the labor market and have continued to grow the informal sector grew rapidly in latin america over the past few decades comprising up to half of the working population in many countries some attribute the growth in alternative work arrangements and informality to regulations and taxes while others argue that it is precisely the lack of enforcement of regulations that allows unprotected employment arrangements to flourish we examine whether reducing taxes associated with employment stimulates formal sector employment we exploit the fact that the tax reform introduced in colombia in 2012 affected only certain types of workers and not others in particular workers earning less than ten times the minimum wage and self employed workers with more than two employees experienced a reduction of payroll taxes of 13 5 percent between 2013 and 2014 we use the colombian household surveys social security records and the monthly manufacturing sample to conduct difference in differences analyses of the reform we find evidence of increased formal employment for the affected groups after the reform using all three data sets we find that the probability of formal employment and the likelihood of transitioning into registered employment increased for the affected groups after the reform we also find that the level and share of permanent employment relative to temporary employment grew after the reform for those earnings less than ten times the minimum wage the results are greatest for those in smaller firms and for those earnings close to the minimum wage

disability benefits consumption insurance and household labor supply while a mature literature finds that disability insurance di receipt discourages work the welfare implications of these findings depend on two rarely studied economic quantities the full cost of di allowances to taxpayers summing over di transfer payments benefit substitution to or from other transfer programs and induced changes in tax receipts and the value that individuals and families place on receiving benefits in the event of disability we comprehensively assess these missing margins in the context of norway s di system drawing on two strengths of the norwegian environment first norwegian register data allow us to characterize the household impacts and fiscal costs of disability receipt by linking employment taxation benefits receipt and assets at the person and household level second random assignment of di applicants to norwegian judges who differ systematically in their leniency allows us to recover the causal effects of di allowance on individuals at the margin of program entry accounting for the total effect of di allowances on both household labor supply and net payments across all public transfer programs substantially alters our picture of the consumption benefits and fiscal costs of disability receipt while di allowance causes a significant increase in household income and consumption on average it has little impact on income or consumption of married applicants because spousal earnings responses via the added worker effect and benefit substitution entirely offset di benefit payments among those who are allowed relative to those who are denied to develop the welfare implications of these findings we estimate a dynamic model of household behavior that translates employment reapplication and savings decisions into revealed preferences for leisure and consumption we find that household valuation of receipt of di benefits is considerably greater for single and unmarried individuals than for married couples because spousal labor supply substantially buffers household income and consumption in the event of di denial

disability benefit generosity and labor force withdrawal abstract a key component for estimating the optimal size and structure of disability insurance di programs is the elasticity of di claiming with respect to benefit generosity yet in many countries including the united states all workers face identical benefit schedules which are a function of one s labor market history making it difficult to separate the effect of the benefit level from the effect of unobserved preferences for work on individuals claiming decisions to circumvent this problem we exploit exogenous variation in di benefits in austria arising from several reforms to its di and old age pension system in the 1990s and 2000s we use comprehensive administrative social security records data on the universe of austrian workers to compute benefit levels under six different regimes allowing us to identify and precisely estimate the elasticity of di claiming with respect to benefit generosity we find that over this time period a 1 increase in potential di benefits was associated with a 1 2 increase in di claiming

disability in italian households income poverty and labour market participation this article studies the economic effects of disabled members on italian households with the aim of identifying a suitable target group for welfare policies survey of households income and wealth data for the year 2000 is used preliminary results show significant differences in levels of income and poverty diffusion to the detriment of households with disabled members we propose an exogenous explanation the replacement ratio between disability benefits and expected labour income shows that disability benefits do not compensate the potential incomes of the disabled person and of the possible carer except in households with severe socioeconomic disadvantages we also propose an endogenous explanation applying a logit model we show that the labour market participation of the possible carer is reduced in households with disabled persons in order to increase the income of the households with disabled members policy recommendations include the provision of care services and structural policies to impro

the impact of economic conditions on participation in disability programs evidence from the coal boom and bust abstract we examine the impact of the coal boom of the 1970 s and the coal bust of the 1980 s on disability program participation these shocks provide clear evidence that as the value of labor market participation increases disability program participation falls for the disability insurance program the elasticity of payments with respect to local earnings is between 0 3 and 0 4 and for supplemental security income the elasticity is between 0 4 and 0 7 consistent with a model where qualifying for disability programs is costly the relationship between economic conditions and program participation is much stronger for permanent than for transitory economic shocks

transaction costs the opportunity cost of time and procrastination in charitable giving abstract we conduct a laboratory experiment to study whether giving people more time to donate to charity reduces donations people may intend to donate but because of the transaction costs of doing so postpone making the payment until they are less busy and having postponed making the donation once keep postponing we conjecture that transaction costs will have a greater effect on donations if the solicitation is received when the opportunity cost of time is high we find evidence of a transaction cost reducing donations with the size of this effect depending on the opportunity cost of time but no statistically significant evidence that giving people more time to donate increases procrastination and thus reduces donations

screening disability insurance applications this paper investigates the effects of stricter screening of disability insurance applications a large scale experiment was setup where in two of the 26 dutch regions case workers of the disability insurance administration were instructed to screen applications more stringently the empirical results show that stricter screening reduces long term sickness absenteeism and disability insurance applications we find evidence for direct effects of stricter screening on work resumption during the period of sickness absence and for self screening by potential disability insurance applicants stricter screening seems to improve targeting efficiency without inducing negative spillover effects to the inflow into unemployment insurance the costs of stricter screening are only a small fraction of the monetary benefits

the impact of stricter criteria for disability insurance on labor force participation this paper studies the effect of a large scale policy change in the austrian disability insurance program which tightened eligibility criteria for men above a certain age using administrative data on the universe of austrian private sector employees the results of difference in difference regressions suggest a substantial and statistically significant decline in disability enrollment of 6 to 7 4 percentage points and an increase in employment of 1 6 to 3 4 percentage points the policy change had important spillover effects into the unemployment and sickness insurance program specifically the share of individuals receiving unemployment benefits increased by 3 5 to 3 9 percentage points and the share receiving sickness insurance benefits by roughly 0 7 percentage points

disability screening and labor supply evidence from south africa yet research that examines the poverty reduction and labor supply effects of disability programs has taken place exclu sively in developed countries with relatively low unemployment and high labor force participa tion rates in developing countries with high unemployment rates the disincentive effect of cash transfers on labor supply has often been assumed to be economically insignificant anne case and angus deaton 1998 in this paper i provide initial evidence on and draw attention to the effect of the south africa disability grant dg program on labor supply in the context of a policy change in disability screening i use a difference in differences estimator to assess the effect of a change toward a less intensive dis ability screening on labor force nonparticipation for older individuals if screening for disability benefit programs were perfect the supply of disability benefits would be independent of labor supply decisions and only those unable to work due to health con ditions would receive benefits however the dis ability screening process is imperfect because it is in practice difficult to determine whether a person is able to work which is the typical test of eligibility for disability benefit programs recent evidence suggests that the work disincen tive effects of disability benefits are expected to

the employment effects of terminating disability benefits abstract few social security disability insurance di beneficiaries return to the labor force making it hard to assess their likely employment in the absence of benefits using administrative data i examine the employment of individuals who lost di eligibility after the 1996 removal of drug and alcohol addictions as qualifying conditions approximately 22 started working at levels that would have disqualified them for di an employment response that is large relative to their work histories those who received di for 2 3 years had the largest response suggesting that a period of public assistance may maximize the employment of some disabled individuals

the married widow marriage penalties matter marriage penalties are a controversial feature of many government policies empirical evidence of their behavioral effects is quite mixed which is surprising because economic theory predicts that they should have an impact on the headship decision we investigate the removal of marriage penalties from the surviving spouse pensions of the canadian public pension system in the 1980s these reforms provide a simple and transparent source of identification our results indicate that marriage penalties can have large and persistent effects on marriage decisions we also present evidence suggesting that it is individuals with characteristics correlated with greater wealth who respond to the penalties jel j1 h2

temporary disability insurance and labor supply evidence from a natural experiment most developed countries have compulsory insurance programs for temporary disability that is cash benefits for non work related sickness despite the economic significance of these programs little is known about their effects on work absenteeism or labor supply we exploit a policy reform that consisted of the abolishment of a waiting day together with an increase of cash benefits for short sick leaves we find that the total number of days of sickness absence was reduced by the reform which is likely due to the fact that the abolishment of the waiting period made it less costly for workers to be absent for short periods

the effects of expanding the generosity of the statutory sickness insurance system summary this article evaluates an expansion of employer mandated sick leave from 80 to 100 of forgone gross wages in germany we employ and compare parametric difference in difference did matching did and mixed approaches overall workplace absences increased by at least 10 or 1 day per worker per year we show that taking partial compliance into account increases coefficient estimates further heterogeneity in response behavior was of great importance there is no evidence that the increase in sick leave improved employee health a finding that supports a shirking explanation finally we provide evidence on potential labor market adjustments to the reform copyright 2013 john wiley sons ltd

adjustment cost and incentives to work evidence from a disability insurance program abstract how important is adjustment cost for individuals who face a change in work incentives induced by a policy change i provide the first estimate of adjustment cost in the context of a disability insurance di program by exploiting a policy change that increased work incentives by increasing the exemption threshold i use bunching at the thresholds to estimate adjustment cost and earnings elasticity the estimates of adjustment cost are quite sizeable and heterogeneous the estimates of earnings elasticity from both static and dynamic models are larger than the elasticity estimated with no adjustment cost suggesting that adjustment cost attenuates the responses to work incentives policies designed to increase labor supply will work if the work incentives are large enough to offset the adjustment cost accounting for adjustment cost then might explain the disparate findings on the effects of an increase in work incentives on the labor supply of beneficiaries of di programs