dynamic programming model estimates of social security disability insurance application timing this paper develops a dynamic programming model of the social security disability insurance ssdi application timing decision we estimate the time to application from the point at which a health condition first begins to affect the kind or amount of work that a currently employed person can do we use health and retirement study hrs and restricted access social security earnings data for estimation our results show that the type of work limiting health condition presence of employer accommodation and the relative value of income in the application state to income in the work state significantly affect the timing of ssdi application copyright 2004 john wiley sons ltd

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

the effect of income on mortality evidence from the social security notch abstract legislation in the 1970s created a notch in social security payments with those born after january 1 1917 receiving sharply lower benefits using restricted use versions of the national mortality detail file combined with census data we use this quasi experiment to examine the income mortality link in an elderly population estimates from difference in difference and regression discontinuity models show the higher income group has a statistically significantly higher mortality rate contradicting the previous literature we also found that younger cohorts responded to lower incomes by increasing postretirement work effort suggesting that moderate employment has beneficial health effects for the elderly

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 effect of old age assistance on retirement abstract researchers have devoted considerable attention to analyzing the impact of social security on retirement with mixed findings however the means tested program old age assistance oaa dwarfed social security until the 1950s and coincided with the early decline in elderly labor force participation also oaa benefits were determined by the states a key source of policy variation i estimate the relationship between oaa benefits and elderly participation using individual data from the 1940 and 1950 censuses oaa s impact is found to be strong and implies that participation would have risen slightly instead of falling if benefits had not increased during the 1940s

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

foreign aid and economic growth an econometric study of bangladesh bangladesh is one of the poorest countries in the world since independence in 1971 bangladesh has received a large inflow of foreign capital from various countries for rapid economic progress bangladesh thus provides a test case for examining the effectiveness of foreign capital in promoting economic growth focussing on the supply side of the economy an econometric model is developed to quantify the effects of foreign aid and its various components on economic growth the model is tested using available time series data on bangladesh from 1972 to 1988 keeping data limitations measurement problems and other econometric problems in mind the empirical results indicate the domestic resources exert a stronger impact on growth than foreign resources foreign resources in its highly aggregative form do not show any significant contribution to growth however its decomposition into various components show that loans are more effective than grants and food aid is more effective than commodity or period

the effects of health aid on child health promotion in developing countries cross country evidence although epidemiological knowledge in relation to child health has improved in the last few decades around 3 million children die each year in developing countries from preventable diseases the international development community views increased immunization coverage for children as an important step in eliminating or reducing these deaths many developing countries have very limited resources to tackle major health problems and have to rely on external finance this article examines the impact of foreign aid devoted to the health sector on child health promotion in developing countries two proxies for child health promotion are used a immunization against measles and b immunization against diphtheria pertussis tetanus dpt a range of model specifications and panel data econometric techniques are applied to data covering the period 1990 to 2005 this article finds a positive and statistically significant link between health aid and the measures of child health promotion

anchoring inflation expectations in the face of oil shocks in the proximity of zlb a tale of two targeters this paper applies a n ardl framework to two longstanding inflation targeting policy regimes in order to assess the relation between oil prices dynamics and inflation expectations and the further consequences created by a proximal zlb situation the application is based on data from january 1994 to june 2018 for new zealand and the uk we focus on oil price shocks as a variable of interest and this was found to have an asymmetric effect on inflation expectations one further key finding is that the real effective exchange rate has significant impacts on inflation expectations and this is indicative of an exchange rate pass through to inflation via an inflation expectations channel in general we find that inflation exchange rate money supply output growth unemployment and fiscal deficit surplus have significant implications for inflation expectations inflation expectations are also influenced by their past behaviour indicating adaptive inflation expectations this study contributes to the debate on the inflation targeting at zlb

foreign aid and economic growth in cameroon cameroon is classified as a lower middle income country since it became a unified and independent country in 1961 cameroon has received significant amounts of foreign aid most of it from france and the european economic community since the 1960s economic growth in the country has been quite significant between 1965 and 1980 the gross domestic product grew at an average annual rate of 5 1 and at a rate of 2 3 between 1980 and 1990 cameroon seems a good test case for determining the effects of foreign aid on economic growth in developing countries an econometric model based on the neoclassical production function is developed and used to test the relationship between foreign aid and eonomic growth the model is tested using time series datd on the country from 1971 to 1990 the results show that domestic resources have a stronger impact on economic growth in cameroon than foreign resources these results however must be taken with the understanding that the data suffer from measurement probl

inflation forecast targeting implementing and monitoring inflation targets abstract inflation targeting is shown to imply inflation forecast targeting the central bank s inflation forecast becomes an explicit intermediate target inflation forecast targeting simplifies both implementation and monitoring of monetary policy the weight on output stabilization determines how quickly the inflation forecast is adjusted towards the inflation target money growth or exchange rate targeting is generally inferior than inflation targeting and leads to higher inflation variability commitment to target rules may be better than commitment to instrument rules

the dynamic relationship between disability onset earnings and disability insurance application and receipt at the time of disability onset the effect of disability insurance on earnings is limited by the finding that work prevented respondents who account for the majority of benefit claims have negligible earnings regardless of application status

aid growth nexus empirical evidence from fiji foreign aid to the island economies is a major source for foreign exchange and resource needs this paper presents an empirical analysis of the relationship between foreign aid and economic growth in the case of fiji a neoclassical production function is applied to estimate the aid growth nexus since the data employed are time series for the period 1968 to 1996 the autoregressive distributed lag approach to cointegration is utilized to estimate the models components of total aid such as grant aid loan aid technical cooperation bilateral and multilateral aid flows are also utilized to estimate a disaggregated short run and long run relationship between foreign aid and economic growth the results show that total aid flows and its various forms i e bilateral aid grant aid and technical cooperation grant aid has a significant impact on economic growth in fiji as for domestic resources only exports and private investments in two equations show positive contribution to growth

impacts of official development assistance on agricultural growth savings and agricultural imports abstract this paper explores the links between development assistance agricultural output growth and imports in 56 developing economies over the period 1974 1990 the empirical model treats agricultural growth and imports savings and aid as endogenous the analysis also accounts for differences in macroeconomic policies the results show that aid had a positive impact on agricultural growth a robust relationship exits between aid and agricultural imports consistent with the argument that aid helps industrialized countries through market expansion and strengthened trade ties

the impact of central bank independence on the performance of inflation targeting regimes abstract this paper examines the effects of inflation targeting on inflation in both advanced and emerging economies we do not detect significant effects in advanced economies and only find small benefits in emerging economies in line with previous studies however when we differentiate the impact of inflation targeting based on the degree of central bank independence we find large effects in emerging economies with low central bank independence our results therefore suggest that central bank independence is not a prerequisite for countries to experience significant declines in inflation following the adoption of inflation targeting furthermore we provide evidence that one channel through which inflation targeting lowers inflation more in countries with low central bank independence is the reduction of budget deficits following the adoption of an inflation target

the case for presenteeism evidence from norway s sickness insurance program can a work first strategy control moral hazard problems in temporary disability insurance and accelerate recovery based on empirical analysis of norwegian data we show that it can activation requirements not only bring down benefit claims they also reduce the likelihood that long term sickness absence leads to inactivity our findings show that absentees who are assigned graded partial absence certificates by their physician have shorter absences and higher subsequent employment rates than they would have had on regular sick leave we conclude that the activation strategies that in recent years have permeated european and us welfare policy may fruitfully be carried over to sick leave insurance for temporary disabled workers

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

health and labor market performance the case of diabetes technological innovation has reduced the effect of diabetes diabetic behavioral modification in the face and expectation of medical improvement should lead to improved labor market outcomes this article uses three cross sectional data sets from 1976 1989 and 1992 to document improvements in diabetic labor market performance women diabetics have significantly increased their labor force participation while male diabetics have slightly reduced their participation relative to nondiabetics

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

can social security explain trends in labor force participation of older men in the united states after a long decline the labor force participation rate lfpr of older men in the united states leveled off in the 1980s and began to increase in the late 1990s we examine how changes in social security rules affected these trends we attribute only a small portion of the decline from the 1960s 80s to the increasing generosity of social security over this period increases in the full retirement age and the delayed retirement credit explain one quarter to one half of the recent increase in the lfpr increasing educational attainment and increasing lfpr of married women also contributed to the recent rise

dollarization exchange rate regimes and government quality abstract the dollarization of the domestic banking system represents a source of vulnerability for emerging market countries and a debate has emerged over whether the exchange rate regime has an impact on dollarization this paper argues that the regime is far less important than the literature has previously claimed unofficial dollarization results from a lack of faith in the domestic currency which ultimately stems from the belief that the government will not follow policies that promote long run currency stability empirical results indicate that improved government quality reduces unofficial dollarization while the exchange rate regime plays no direct role in promoting dollarization

german aid and trade versus namibian gdp and labour productivity this paper examines the effects of german foreign aid to and net trade with namibia on namibia s recent 1985 95 economic performance the analysis suggests significant benefits for namibia from trade with and assistance from germany however domestic capital is found to determine namibian economic growth more than net trade with germany and german foreign aid to namibia while the effect of german capital tends be larger than that of german aid a need for direct foreign investment from germany to namibia is inferred two types of further investigations are required a joint determination of economic growth aid trade and capital formation and a disaggregation of german aid to namibia with an analysis of its individual impacts compared with similar effects of aid from other donors

consumer bankruptcy and financial health this paper estimates the effect of chapter 13 bankruptcy protection on financial health using a new data set linking bankruptcy filings to credit bureau records our empirical strategy uses the leniency of randomly assigned judges as an instrument for chapter 13 protection we find that chapter 13 protection decreases an index measuring adverse financial events such as civil judgments and repossessions by 0 323 standard deviations and increases the probability of being a homeowner by 13 2 percentage points chapter 13 protection has little impact on open unsecured debt but decreases the amount of debt in collections by 1 333

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 long run impact of cash transfers to poor families lleras muney we estimate the long run impact of cash transfers to poor families on children s longevity educational attainment nutritional status and income in adulthood to do so we collected individual level administrative records of applicants to the mothers pension program the first government sponsored welfare program in the united states 1911 1935 and matched them to census wwii and death records male children of accepted applicants lived one year longer than those of rejected mothers they also obtained onethird more years of schooling were less likely to be underweight and had higher income in adulthood than children of rejected mothers jel i12 i14 i18 i32 i38 j16 n32

distinguishing income from substitution effects in disability insurance a set of studies conducted over the last 15 years has produced a near consensus that the social security disability insurance system ssdi has substantial disincentive effects on the labor supply of near elderly males diminishing labor force participation increasing the sensitivity of labor force exit decisions to adverse economic shocks and encouraging those nearing retirement to claim disability benefits and subsequently transfer into the social security retirement program yet efforts by the social security administration ssa to encourage labor supply among the disabled by removing the work disincentives built into ssdi have been almost entirely unsuccessful most notably in 1999 congress authorized the ticket to work program which provides an array of inducements for current ssdi beneficiaries to take up employment including permitting a trial work period of up to nine months providing 7 75 years of ongoing medicare eligibility following return to work and providing three years of automatic benefit reinstatement when claimants workplace earnings fall below a threshold level each of these steps reduces the implicit tax placed on labor supply by the ssdi program despite these lures fewer than 1 400 0 01 percent of the 12 2 million tickets issued to date have led to successful workforce integration autor and duggan 2006

optimal income transfer programs intensive versus extensive labor supply responses this paper analyzes optimal income transfers for low incomes labor supply responses are modeled along the intensive margin intensity of work on the job and along the extensive margin participation into the labor force when behavioral responses are concentrated along the intensive margin the optimal transfer program is a classical negative income tax program with a substantial guaranteed income support and a large phasing out tax rate however when behavioral responses are concentrated along the extensive margin the optimal transfer program is similar to the earned income tax credit with negative marginal tax rates at low income levels and a small guaranteed income carefully calibrated numerical simulations are provided

how do patents affect follow on innovation evidence from the human genome we investigate whether patents on human genes have affected follow on scientific research and product development using administrative data on successful and unsuccessful patent applications submitted to the us patent and trademark office we link the exact gene sequences claimed in each application with data measuring follow on scientific research and commercial investments using this data we document novel evidence of selection into patenting patented genes appear more valuable prior to being patented than non patented genes this evidence of selection motivates two quasi experimental approaches both of which suggest that on average gene patents have had no quantitatively important effect on follow on innovation

inflation targeting genuine effects or publication selection bias abstract this paper uses a meta regression analysis mra to evaluate the impact of publication selection bias as for the macroeconomic effects of inflation targeting it a popular approach to implementing monetary policy documented in the existing literature using 8 059 point estimates from 113 studies we show that a significant part of the documented positive effects of it on inflation and to some extent output growth volatility is in fact due to publication selection bias in particular results pointing to lower inflation volatility and higher real gdp growth tend to be favored by researchers as well as those pointing to statistically significant macroeconomic effects however even after controlling for these two types of biases we find it to be correlated with lower inflation and higher real gdp growth differently the evidence on the it inflation volatility relationship is found to be less clear

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

inflation targeting in emerging economies panel evidence abstract this paper shows there is no evidence that the inflation targeting regime it improves economic performance as measured by the behavior of inflation and output growth in developing countries the control of common time effects results in less negative and less significant it impacts on inflation inflation volatility and output growth volatility than previously found in the literature additionally our analysis shows robust evidence of lower output growth during it adoption on balance although lower long run mean inflation signals that the central banks of emerging economies with inflation targeting are more inflation averse the costs of disinflation have not been lower than under other monetary regimes

disability benefits replacement ratios and the labour market a time series approach in this paper a study of factors affecting the number of disability beneficiaries in norway is presented equations determining entry rates into the disability benefit system are estimated using aggregated time series data grouped by sex and age unemployment is found to influence disability entry the results regarding effects of the replacement ratio are ambiguous a model determining the number of beneficiaries including the estimated entry equations is presented the model is used to simulate the effect of counterfactual changes in exogenous variables on the number of disability beneficiaries

international experiences with different monetary policy regimes any views expressed in this paper are those of the author only and not those of columbia university or the national bureau of economic research abstract this paper examines the international experiences with four basic types of monetary policy regimes 1 exchange rate targeting 2 monetary targeting 3 inflation targeting and 4 monetary policy with an implicit but not an explicit nominal anchor the basic theme that emerges from this analysis is that transparency and accountability are crucial to constraining discretionary monetary policy so that it produces desirable long run outcomes because the devil is in the details in achieving transparency and accountability what strategy will work best in a country depends on its political cultural and economic institutions as well as on its past history

does inflation targeting make a difference in developing countries we evaluate the treatment effect of inflation targeting in thirteen developing countries that have adopted this policy by the end of 2004 using a variety of propensity score matching methods we show that on average inflation targeting has large and significant effects on lowering both inflation and inflation variability in these thirteen countries however the effectiveness of inflation targeting on lowering inflation is found to be quite heterogeneous the performance of a given inflation targeting regime can be affected by country characteristics such as government s fiscal position central bank s desire to limit the movements of exchange rate its willingness to meet the preconditions of policy adoption and the time length since the policy adoption

the craft of labormetrics using a wide array of examples from the literature and from original estimates the author examines the pitfalls that make good empirical research in labor economics at least as much craft as statistical technique among the subjects discussed are the appropriateness and cleanliness of data problems of extreme observations the validity of attempts to produce exogeneity using instrumental variables natural experiments and structural models and the treatment of selectivity and unobservable individual effects the author stresses the importance of testing empirical results to ensure that they make sense and of presenting them clearly and economically

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

economic growth export and external debt causality the case of african countries empirical investigation of the export driven economic growth hypothesis has provided mixed results in a bivariate causality framework the problem with such bivariate causality analysis is that there can be an omitted variable which could adversely affect the results this paper looks at the trivariate causality analysis of african countries by introducing external deby servicing as a third variable in the export economic growth analysis the results indicate that there is a feedback or bidirectional causality between external debt servicing economic growth and exports evidence of the 1983 90 subperiod is consistent with the argument that the structural adjustment programmes which were designed to remove economic distortions promote exports and encourage external debt management increased growth in the countries involved

growth in africa does the source of investment financing matter this paper examines empirical evidence for 11 sub saharan african countries on the relationship between economic growth and three principal sources of investment funds foreign aid foreign direct investment and domestic saving in light of the shortcomings of traditional cross section analyses the time series approach is used instead modern time series methods are rigorously applied beginning with unit root tests and followed by model specifications that reflect the revealed temporal behaviours of the variables in each of the 11 countries domestic saving seems to play a somewhat more important role in generating economic growth than foreign direct investment or foreign aid however the mixture of results across the 11 countries implies that in general it is not possible to rank one source of investment financing ahead of any other

pensions and retirement evidence from union army veterans i investigate the factors that fostered rising retirement rates prior to social security and most private sector pensions by estimating the income effect of the first major pension program in the united sates that covering union army veterans the elasticity of nonparticipation with respect to union army pension income was 0 73 the findings suggest that secularly rising income explains a substantial part of increased retirement rates comparisons with elasticities of nonparticipation with respect to social security income suggest that the elasticity of labor force nonparticipation may have decreased with time perhaps because of the increasing attractiveness of leisure

disability benefit take up and local labor market conditions exploiting county level variation in oil producing areas from shocks to world oil and gas prices we study how local labor market conditions affect disability take up we extend well known previous work using a similar research design by analyzing a different price shock a larger more representative set of labor markets and a more recent period marked by skyrocketing disability payments our estimated elasticity for ssdi payments with respect to earnings of 0 29 is surprisingly similar to earlier findings our preferred ssi elasticity estimate of 0 16 is smaller than previous findings but we show that ssi programmatic changes explain most of the difference jel codes j0 h0

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

the impact of foreign aid on economic growth in papua new guinea this article investigates the impact of foreign aid on economic growth in papua new guinea png using time series data for the period 1965 to 1999 following the most recent literature the article examines whether aid effectiveness is conditional on levels of economic policy and governance an empirical model is estimated using the autoregressive distributed lag ardl approach to cointegration proposed by pesaran and shin 1995 results provide little evidence that aid and its various components have contributed to economic growth in png there is some evidence that aid is more effective during periods when the country has undertaken a world bank structural adjustment program sap an alternative interpretation is that a sap may be more effective at spurring growth when supported by foreign aid

does welfare inhibit success the long term effects of removing low income youth from the disability rolls i estimate the effects of removing low income youth with disabilities from supplemental security income ssi on their earnings and income in adulthood using a regression discontinuity design based on a 1996 policy change in age 18 medical reviews i find that youth who are removed from ssi at age 18 recover one third of the lost ssi cash income in earnings ssi youth who are removed and stay off ssi earn on average 4 400 annually and they lose 76 000 in present discounted observed income over the 16 years following removal relative to those who do not receive a review jel i30 i38 j14 supporters of welfare programs defend them as vital lifelines for those who face barriers to work while critics charge that these programs create perverse incentives to qualify and perpetuate dependency encapsulating this debate is the controversy over the us supplemental security income ssi program a program that provides cash payments and medicaid eligibility to low income children and adults with disabilities and the aged elderly after three decades of rapid expansion ssi is now the largest nonwork based cash welfare program in the united states paying about 50 billion each year to 8 million recipients including 1 3 million children 1 ssi has been singled out by policymakers and the media for potential perverse incentives

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 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

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

how social security and medicare affect retirement behavior in a world of incomplete markets this paper provides an empirical analysis of how the u s social security and medicare insurance system affect the labor supply of older males in the presence of incomplete markets for loans annuities and health insurance we estimate a detailed dynamic programming dp model of the joint labor supply and social security acceptance decision focusing on a sample of males in the low to middle income brackets whose only pension is social security the dp model delivers a rich set of predictions about the dynamics of retirement behavior and comparisons of actual vs predicted behavior show that the dp model is able to account for wide variety of phenomena observed in the data including the pronounced peaks in the distribution of retirement ages at 62 and 65 the ages of early and normal eligibility for social security benefits respectively we identify a significant fraction of health insurance constrained individuals who have no form of retiree health insurance other than medicare and who can only obtain fairly priced private health insurance via their employer s group health plan the combination of significant individual risk aversion and a long tailed pareto distribution of health care expenditures implies that there is a significant security value for these individuals to remain employed until they are eligible for medicare coverage at age 65 overall our model suggests that a number of heretofore puzzling aspects of retirement behavior can be viewed as artifacts of particular details of the social security rules whose incentive effects are especially strong for lower income individuals and those who do not have access to fairly priced loans annuities and health insurance

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