home production and social security reform this paper incorporates home production into a dynamic general equilibrium model of overlapping generations with endogenous retirement to study social se curity reforms as such the model dierentiates both consumption goods and labor eort according to their respective roles in home production and market activities using a calibrated model we nd that eliminating the current pay as you go social security system has important implications for both labor supply and consumption decisions and that these decisions are in uenced by the presence of a home production technology comparing our benchmark economy to one with dierentiated goods but no home production we nd that eliminating social security bene ts generates larger welfare gains in the presence of home produc tion this result is due to the self insurance aspects generated by the presence of home production comparing our economy to a one good economy without home production we show that the welfare gains of eliminating social security are magni ed even further these policy analyses suggest the importance of mod eling home production and distinguishing between both time use and consumption goods depending on whether they are involved in market or home production

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

globalization and the great u turn income inequality trends in 16 oecd countries the debate on the resurgence of income inequality in some advanced industrial societies has often focused on the impact of an increasingly integrated world economy typified by growing capital mobility heightened international competition and an increase in migration this study represents one of the first systematic cross national examinations of the role of globalization in the inequality u turn results indicate on the one hand that total inequality variation is principally affected by the percentage of the labor force in agriculture followed by the institutional factors union density and decommodification and only then by globalization on the other hand longitudinal variation in inequality while still dominated by the percentage of the labor force in agriculture is also principally affected by aspects of globalization such as southern import penetration and direct investment outflow and to a lesser extent by migration in other words globalization explains the longitudinal trend of inc

social security pensions and retirement behavior within the family this paper estimates a structural model of family retirement using us data from the health and retirement study hrs it provides further insight into household retirement decision making and the reasons for interdependence in the retirement decisions of each spouse improvements in hrs data and matched employer provided pension histories allow more precise identification of key parameters governing interdependent behaviour within the household in an earlier study we found that interdependence was due to preferences rather than coordination of retirement incentives in the budget and in particular that it is not a correlation in preferences but the appearance of the spouse s retirement status in the husband s and wife s utility function that is largely responsible for coordination of retirement between spouses we now find that a measure of how much each spouse values being able to spend time in retirement with the other accounts for a good portion of that apparent interdependence for the wife the husband s retirement status influences her retirement decision only if she values spending time in retirement with her husband for husbands the effect of having the wife already retired on his retirement decision is roughly doubled if he enjoys spending time in retirement with his wife but there is some effect even if he does not this is consistent with our earlier findings that the husband is more influenced by having a retired spouse than the wife is the increase in the extent of the dependence of the wife s labour supply on the husband s retirement from our past work probably is traceable to better measurement of the opportunity set facing the husband in hrs data once estimated we use the model to investigate the labour supply effects of alternative social security policies examining the effect of dividing credit for earnings evenly between spouses or of basing social security benefits on the amounts accumulated in private accounts both policies change the relative importance of spouse and survivor social security benefits within the household and both raise the relative reward to work later in the life cycle the incentives created are modest and retirement responds accordingly nevertheless at some ages such as 65 there may be as much as a 6 increase in the old age work force under privatized accounts copyright 2004 john wiley sons ltd

an equilibrium model of the business cycle with household production and fiscal policy the authors estimate a dynamic general equilibrium model of the u s economy that includes an explicit household production sector and stochastic fiscal variables they use their estimates to investigate two issues first the authors analyze how well the model accounts for aggregate fluctuations they find that household production has a significant impact and reject a nested specification in which changes in the home production technology do not matter for market variables second the authors study the effects of some simple fiscal policy experiments and show that the model generates different predictions for the effects of tax changes than similar models without home production copyright 1997 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

retirement in dual career families a structural model a structural econometric model of retirement of dual career couples is specified and estimated with panel data from the national longitudinal survey of mature women a coincidence of spouses retiring together despite the younger ages of wives suggests explicit efforts at coordination the estimates suggest that one reason is a correlation of tastes for leisure more important each spouse and perhaps husbands in particular values retirement more once their spouse has retired the opportunity set accounts for peaks in the retirement hazards of each spouse individually but not for peaks in the simultaneous retirement of both spouses

consumer demand and the life cycle allocation of household expenditures the purpose of this paper is to estimate the parameters of household preferences that determine the allocation of goods within the period and over the life cycle using micro data in doing so the authors are able to identify important effects of demographics labor market status and other household characteristics on the intertemporal allocation of expenditure they test the validity of the life cycle model using excess sensitivity tests and find that controlling for demographics and labor market status variables can largely explain the excess sensitivity of consumption to anticipated changes in income

valuing lost home production of dual earner couples using a life cycle model in which women divide their time between home and market work we establish a link between retirement wealth and the value of forgone home production we use data from the health and retirement study to estimate the model s parameters and adjust the growth rate of gdp to reflect reductions in non market output we find that the value of forgone home production is modest about 25 percent of women s measured earnings

a time series analysis of representative agent models of consumption andleisure choice under uncertainty this paper investigates empirically a model of aggregate consumption and leisure decisions in which utility from goods and leisure is nontime separable the nonseparability of preferences accommodates intertemporal substitution or complementarity of leisure and thereby affects the comovements in aggregate compensation and hours worked these cross relations are examined empirically using postwar monthly u s data on quantities real wages and the real return on the one month treasury bill the estimated values of the parameters governing preferences differ significantly from the values assumed in several studies of real business models several possible explanations of these discrepancies are discussed

retirement effects on health in europe what are the health impacts of retirement as talk of raising retirement ages in pensions and social security schemes continues around the world it is important to know both the costs and benefits for the individual as well as the governments budgets in this paper we use the survey of health ageing and retirement in europe share dataset to address this question in a multi country setting we use country specific early and full retirement ages as instruments for retirement behavior these statutory retirement ages clearly induce retirement but are not related to an individual s health exploiting the discontinuities in retirement behavior across countries we find significant evidence that retirement has a health preserving effect on overall general health our estimates indicate that retirement leads to a 35 percent decrease in the probability of reporting to be in fair bad or very bad health and an almost one standard deviation improvement in the health index while the self reported health seems to be a temporary impact the health index indicates there are long lasting health differences

new evidence on labor supply employment versus hours elasticities by sex and marital status using the tri annual micro panel data of the survey of income and program participation we estimate fixed effects labor supply models separating the extensive and intensive margins the employment elasticity is 0 6 for single men versus 1 1 for married men the employment elasticity is 2 4 for single women versus 1 8 for married women the compensated hours worked elasticity is 0 4 for employed single and married men and 0 7 for employed single and married women the implied aggregate employment elasticity of 1 5 and hours per employee elasticity of 0 5 indicate employment fluctuations account for three fourths of wage induced variation in labor hours

an empirical model of labor supply in a life cycle setting this paper formulates and estimates a structural intertemporal model of labor supply using theoretical characterizations derived from an economic model of lifetime behavior a two step empirical analysis yields estimates of intertemporal and uncompensated substitution effects which provide the information needed to predict the response of hours of work to life cycle wage growth and shifts in the lifetime wage path

taxation and household labor supply we evaluate reforms to the u s tax system in a life cycle setup with heterogeneous married and single households and with an operative extensive margin in labor supply we restrict our model with observations on gender and skill premia labor force participation of married females across skill groups children and the structure of marital sorting we concentrate on two revenue neutral tax reforms a proportional income tax and a reform in which married individuals flle taxes separately separate flling our flndings indicate that tax reforms are accompanied by large increases in labor supply that difier across demographic groups with the bulk of the increase coming from married females under a proportional income tax reform married females account for more than 50 of the changes in hours across steady states while under separate flling reform married females account for all the change in hours

effects of social security policies on benefit claiming retirement and saving abstract an enhanced version of a structural model jointly explains benefit claiming wealth and retirement including reversals from states of lesser to greater work the model is estimated with health and retirement study data alternative beliefs about the future of social security affect claiming behavior effects of three potential policies are also examined increasing the early entitlement age increasing the full retirement age and eliminating the payroll tax for seniors predicted responses to increasing the full entitlement age are sensitive to beliefs

returns to scale market power and the nature of price rigidity in new keynesian models with self fulfilling expectations increasing returns to scale and firms market power are two potential sources of sunspot expectations in neoclassical models we show that in new keynesian models returns to scale and market power can have fundamentally different implications for broad macroeconomic issues including self fulfilling expectations depending on the nature of price rigidity our findings suggest that the design of stabilization monetary policy can depend on precise knowledge about the economy s real and nominal features therefore a clear understanding of the specific economic environment and its relevance to monetary policymaking for ensuring macroeconomic stability can be an integrated part of monetary policy practice

life cycle prices and production we use scanner data and time diaries to document how households substitute time for money through shopping and home production we document substantial heterogeneity in prices paid for identical goods for the same area and time with older households shopping the most and paying the lowest prices doubling shopping frequency lowers a good s price by 7 to 10 percent we estimate the shopper s price of time and use this series to estimate an elasticity of substitution between time and goods in home production of roughly 1 8 the observed life cycle time allocation implies a consumption series that differs markedly from expenditures

early retirement and economic incentives in norway early retirement programmes have gradually reduced the retirement age from 67 to 62 for a majority of the labour force based on micro data for 1990 and 1992 we estimate a competing risk model with three states full retirement partial retirement part time work and full time work we then use the estimated model in simulations to study how financial incentives can be strengthened to extend working life financial incentives educational background and industry affiliation are found to influence retirement behaviour for low and medium incomes the tax system shifts the incentives heavily towards early retirement and in particular towards partial retirement combined with part time work

explaining applications to the u s disability system a semiparametric approach this study investigates the determinants of applications for u s disability benefits between 1986 and 1993 using a semiparametric discrete factor procedure separately for men and women approximating a dynamic optimization model the estimation accounts for a variety of potential biases that were unaddressed in prior studies our results indicate different responses of men and women to variations in policy measures past labor earnings and fringe benefits as well as benefit eligibility and benefit amounts clearly affect application behavior

disability transfers and the work decision of older men the potential causal relationship between the availability and generosity of disability transfers and the nonparticipation rates of older men is often asserted and much studied parsons 1980 haveman and wolfe 1984 leonard 1986 however estimates of the magnitude of this linkage vary widely the growth in transfer availability and generosity has been credited with from 30 to 100 percent of the significant post 1960 fall in older male participation rates the disparity in these research results stems primarily from 1 alternative sources of data that differentially constrain estimation of relevant expected wage and transfer incomes 2 specifications that are unable to distinguish income transfer from labor market effects and 3 reliance on measures of health status that are endogenous to the work leisure decision this study seeks to narrow the range of estimates by addressing each of these issues our utility maximization model of work status choice assumes that workers who differ in health status choose between the mutually exclusive options of working at the wage offered for their characteristics and accepting public or private disability transfers because the income flows in the two options are censored they are estimated using switching regression techniques as expectations conditional on exogenous individual characteristics hence accounting for the potentially endogenous process that separates wage earners from transfer recipients the marginal utilities of income from the two sources are allowed to differ because of stigma effects in the estimation we adjust the choice based nature of our sample employ longitudinal earnings data to measure expected changes in as distinct from the expected level of income in the two options and use a separately estimated latent health status measure largely purged of its endogeneity with the participation decision

does home production replace consumption spending evidence from shocks in housing wealth in the great recession becker s theory of home production suggests substitutability between consumption spending and home production using panel data with detailed information on spending and time use we analyze househ

social polarisation in global cities theory and evidence this paper examines the debate over social polarisation in global cities it focuses on the claims made by sassen that the processes of economic change in such cities are leading to a growing polar

changes in labor force participation in the united states the labor force participation rate in the united states increased almost continuously for two and a half decades after the mid 1960s pausing only briefly during economic downturns the pace of growth slowed considerably during the 1990s however and after reaching a record high of 67 3 percent in the first quarter of 2000 participation had declined by 1 5 percentage points by 2005 this paper reviews the social and demographic trends that contributed to the movements in the labor force participation rate in the second half of the twentieth century it also examines the manner in which developments in the 2000s reflect a break from past trends and considers implications for the future

the effects of health events on the economic status of married couples this paper uses measures of exogenous health shocks to identify the different channels through which changes in health conditions affect income wealth and consumption behavior the results indicate that serious health conditions have strong effects on household wealth but that the effects for women are larger and more significant than the effects for men the source of the asymmetry arises from the fact that general living expenses increase when wives become seriously ill while for husbands health shocks do not affect these expenditures

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

international portfolio diversification and endogenous labor supply choice abstract this paper presents a multi country general equilibrium model driven by productivity shocks where labor supply and consumption are chosen endogenously we use this framework to study the effect of labor supply for optimal international diversification we find that the model s ability to help explain home bias depends crucially on the level of substitutability between consumption and non working time quantitatively the non separability in the preferences helps in a nonnegligible way but it cannot entirely explain the extreme degree of home bias in u s portfolios

urban resurgence and the consumer city cities make it easier for humans to interact and one of the main advantages of dense urban areas is that they facilitate social interactions this paper provides evidence for the us suggesting th

the impact of fiscal incentives on student disability rates abstract in this paper i estimate the elasticity of student disability rates with respect to the generosity of state reimbursements the classification response is identified from policy induced variation in the amount of state aid generated by serving a disabled student across local school districts in texas from 1991 1992 through 1996 1997 my central estimates imply that fiscal incentives can explain nearly 40 of the recent growth in student disability rates in texas the magnitude of the institutional response varies by district size and enrollment concentration student race ethnicity and the level of fiscal constraint

retirement home production and labor supply elasticities a standard life cycle model with home production implies a tight relationship between key preference parameters and the changes in time allocated to home production and leisure at retirement we derive this relationship and use data from the atus to explore its quantitative implications the key finding is that the intertemporal elasticity of substitution for leisure and the elasticity of substitution between time and goods in home production are approximately equal in contrast to what is commonly assumed

social polarisation economic restructuring and welfare state regimes the central argument of this paper is that it is misconceived to view social polarisation of occupational structure and incomes in global cities as either inevitable or as a direct product of econo

accounting for recent declines in employment rates among working aged men and women with disabilities during the 1990s while overall employment rates for working aged men and women either remained roughly constant men or rose women employment rates for people with disabilities fell during the same period the fraction of the working aged population receiving social security disability insurance di benefits increased quite dramatically we present simple time series and cross state evidence suggesting that the growth in the di program can account for much of the decline in the relative employment position of men and women with disabilities

post industrialisation job opportunities and ethnocentrism a comparison of twenty two dutch urban economies this article assesses the consequences of the transition to a post industrial urban economy for labour demand and ethnocentrism in the 22 dutch urban agglomerations using municipal level data as well as surveys it is shown that the labour market of the least post industrial cities yields low labour demand for lower educated urbanites upgrading professionalisation thesis while the labour market of the most post industrial cities yields high labour demand for lower educated urbanites polarisation thesis it is furthermore found that lower educated natives in the former are more ethnocentric than in the latter however contrary to what is often claimed in urban studies and the social sciences at large this proves not to be driven by job scarcity in the least post industrial cities the article concludes with suggestions on what might be responsible for this finding

the growth in the social security disability rolls a fiscal crisis unfolding the u s social security disability insurance di program has grown dramatically over the last 20 years in size and expense this growth poses significant risks to the finances of the di program and the broader social security system and raises troubling questions as to whether the program is being misused by claimants this article first provides an overview of the disability insurance program describing who qualifies for the program how an individual applies for benefits and how the level of benefits is determined next we summarize the factors responsible for the growth in the di rolls and discuss how the characteristics of di recipients have changed as a result we then explore the extent of moral hazard in the di program and the effectiveness of the screening process in distinguishing meritorious from nonmeritorious claims finally we identify the challenges that the di program creates for social security finances and social security reform and discuss potential reforms to the di program

why do europeans work so little market work per person is roughly 10 higher in the united states than in sweden however if we include the work carried out in home production the total amount of work only differs by 1 i set up a model and show that differences in policy mainly taxes can account for the discrepancy in both labor supply and home production between sweden and the united states these results are independent of the elasticity of labor supply

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

incentives for the identification and treatment of children with disabilities the supplemental security income program abstract this paper examines how supplemental security income ssi benefit availability and generosity affect the probability that families identify health problems in their children and move onto the ssi rolls first i observe that a liberalization of ssi eligibility in 1990 was followed by a substantial re evaluation of the health status of low income children by their parents then i find that increases in ssi benefits raise the likelihood that a family identifies a chronic impairment in their child my results indicate that cash assistance targeted on children with disabilities promotes the detection and treatment of medical problems in low income children

did vietnam veterans get sicker in the 1990s the complicated effects of military service on self reported health abstract the veterans disability compensation vdc program which provides a monthly stipend to disabled veterans is the third largest american disability insurance program since the late 1990s vdc growth has been driven primarily by an increase in claims from vietnam veterans raising concerns about costs as well as health we use the draft lottery to study the long term effects of vietnam era military service on health and work in the 2000 census we find no evidence that military service affected overall employment rates or overall work limiting disability rates that is health conditions that make work difficult at the same time military service sharply increased federal transfer income especially for lower skilled white men among whom there was also a large negative impact on employment and a marked increase in disability rates the differential impact of vietnam era service on low skilled men cannot be explained by more combat or war theatre exposure for the least educated because high school graduates were at least as likely to be exposed to combat or war theatre as the less educated this leaves the relative attractiveness of vdc for less skilled men and the work disincentives embedded in the vdc system as a likely explanation for our findings

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

the aggregate effects of sectoral reallocations abstract can a one time permanent change in the fundamentals behind the sectoral composition of the economy prompt an aggregate downturn can this downturn be non negligible even if one uses us data to determine the relative size of gross vs net job flows and the importance of job creation costs can one consider the military build down of the 1990s as a plausible cause for the 1990 1991 recession do sectoral reallocations generate responses that are qualitatively similar to productivity shocks we use a variant of the mortensen pissarides 1994 review of economic studies 61 397 415 job creation destruction model calibrate it to us labor market data and run experiments that suggest one can answer yes to all these questions

consumption and time use over the life cycle we incorporate home production in a dynamic general equilibrium model of consumption and savings with illiquid housing and a collateralized borrowing constraint the calibrated model explains life cycle patterns of households time use and consumption of different categories documented from the microdata it predicts that the interaction of the labor efficiency profile and the home production technology explains households time use the resulting income profiles the endogenous borrowing constraint and home production account for the initial hump in consumption the complementarity of home hours home input and housing in home production drives the consumption profiles later in the life cycle

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

increasing returns and unsynchronized wage adjustment in sunspot models of the business cycle a challenge to models of equilibrium indeterminacy based on increasing returns is that required increasing returns for generating indeterminacy can be implausibly large and rise quickly with the relative risk aversion in labor we show that unsynchronized wage adjustment via a relative wage effect can both lower the required degree of increasing returns for indeterminacy to a plausible level and make it invariant to the relative risk aversion in labor consequently indeterminacy and sunspot driven fluctuations can emerge for plausible increasing returns regardless of the relative risk aversion in labor our model generates reasonable dynamics in terms of matching the business cycle and sunspot shocks become more important with labor market friction

cultural amenities and unemployment in dutch cities disentangling a consumerist and productivist explanation for less educated urbanites varying unemployment levels across urban economies previous studies on the advanced economies have shown that unemployment levels of the less educated are low in cities with high employment shares in the advanced producer services scholars have consistently interpreted this finding according to sassen s polarisation thesis this article confronts this production based interpretation with a competing consumption based explanation which focuses on the role of cultural amenities analysing data on 22 dutch metropolitan agglomerations between 1996 and 2008 it is shown that in line with consumerists notions of richard florida advanced producer services settle in cities that are rich in cultural amenities instead of the other way around as classical labour follows capital explanations imply yet only advanced producer services prove to reduce the unemployment levels of the less educated meaning that the polarisation thesis and not the theory on cultural amenities is a valid explanation for the low level of unemployment in post industrial cities

intertemporal substitution in labor supply evidence from micro data the sensitivity of the supply of labor to intertemporal variation in the wage is an important issue in macroeconomics the analysis of social security and pensions and the study of life cycle patterns of work this paper explores two approaches to the measurement of intertemporal substitution that have appeared in the literature the first approach is to use consumption to control for wealth and unobserved expectations about future wages in the labor supply equation the second approach is to estimate a first difference equation for hours in which labor supply from the previous period serves as a control for wealth and wage expectations the results indicate that intertemporal substitution elasticity for married men is positive but small

the longitudinal structure of earnings losses among work limited disabled workers this paper asks what are the dynamic effects of disability on earnings unlike most of the previous literature it uses panel data and fixed effects methods are used to assess how the earnings of disabled workers depart from expected levels over many years before and after the date of onset of their disability the paper also examines how worker characteristics affect earnings losses from disability with particular attention paid to the age at which the person suffers onset disabled men are found to experience sharp drops in earnings that predate the measured date of onset earnings recover rapidly soon after onset with much of the immediate reduction made up in the first two post onset years a modest downward trendfollows resulting in significant long term losses in expected annual earnings of about 12 percent per year being older at onset nonwhite more chronically disabled and less educated cause the losses from disability to be larger and the recovery smaller a large portion of these differences across groups appear to derive from industry affiliation after onset the paper argues the facts are all consistent with a simple human capital explanation of the disability process

family economics and macro behavior in this 1987 presidential address to the american economic association the author explores the contributions of the field of family economics to macroeconomic analysis the focus is on family behavior as an active endogenous factor that both affects and is affected by the evolution of the economy much of the time is spent on long term economic growth although i also discuss short and long cycles in economic activity and the interaction between overlapping generations through social security transmission of inequality and in other ways many conclusions in these and presumably other macro areas change radically when family choices get the attention they deserve excerpt

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

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

work and the accommodation of chronic illness a re examination of the health labour supply relationship this study uses a data set of over 14000 households from the state of new jersey in the usa to estimate the impact of specific chronic health conditions on the probability of employment and finds wide variation of employment impacts across chronic conditions additionally the elasticity of the employment response is generally greater for women and lower skilled workers most notable is the role of comorbidity individuals with multiple conditions have markedly lower probability of employment and chronic illness explains virtually all of the large gap in employment probability for those who have multiple conditions this is shown using a summary index of disease status that correlates closely with employment rates across age groups in the aggregate chronic disease striking in adulthood explains about 10 of the total non employment in the new jersey among those aged 35 74 finally cross sectional evidence gives little support for health as a primary determinant of the aggregate age employment profile

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

taxing women a macroeconomic analysis based on well known evidence on labor supply elasticities several authors have concluded that women should be taxed at lower rates than men we evaluate the quantitative implications and merits of this proposition relative to the current system of taxation setting a proportional tax rate on married females equal to 4 8 increases output and married female labor force participation by about 3 9 3 4 and 6 9 4 0 respectively gender based taxes improve welfare and are preferred by a majority of households nevertheless welfare gains are higher when the u s tax system is replaced by a proportional gender neutral income tax 2011 published by elsevier b v

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

the welfare implications of increasing disability insurance benefit generosity abstract in order to evaluate whether workers are over or under insured through the disability insurance di program we develop a framework that allows us to simulate the benefits as well as the costs associated with marginal changes in payment generosity from a representative cross sectional sample of the population under the assumption that individuals are reasonably risk averse we find that the typical worker would value increased benefits somewhat above the average costs of providing them however whether the benefit increases tend to lower or raise utility when we average across all individuals in our sample is sensitive to assumptions that affect the relative marginal utility of income to disabled individuals

unravelling the global city debate on social inequality a firm level analysis of wage inequality in amsterdam and rotterdam in this article an assessment is made of the consequences of globalisation for urban wage inequality using data on employers in the dutch cities of amsterdam and rotterdam it is shown that simpl

the effects of health wealth and wages on labour supply and retirement behaviour this paper estimates a life cycle model of labour supply retirement and savings behaviour in which future health status and wages are uncertain individuals face a fixed cost of work and cannot borrow against future labour pension or social security income the method of simulated moments is used to match the life cycle profiles of labour force participation hours worked and assets that are estimated from the data to those that are generated by the model the model establishes that the tax structure of the social security system and pensions are key determinants of the high observed job exit rates at ages 62 and 65 removing the tax wedge embedded in the social security earnings test for individuals aged 65 and older would delay job exit by almost one year by contrast social security benefit levels health and borrowing constraints are less important determinants of job exit at older ages for example reducing social security benefits by 20 would cause workers to delay exit from the labour force by only three months

the dutch creative class and how it fosters urban employment growth this paper examines richard florida s creative capital theory in comparison with the human capital theory using a cross section of dutch cities and towns as the sample a class of dutch creative people has been devised with creative and innovative occupations containing 19 per cent of the total dutch labour force employment growth in dutch cities and towns can be predicted both from local education levels and from the presence of a large creative class but especially from the latter this is largely due to employment growth in commercial and financial services and to newly started companies it is concluded that in theory creativity is not very different from human capital nevertheless florida s creative class is a better standard to measure human capital than are education levels

post industrialisation immigration and unemployment how and why the impact of immigration on unemployment differs between dutch cities studies on the substitution thesis in advanced economies show scattered results the impact of immigration on the wages and likelihood of unemployment of the less educated varies strongly both studies on the substitution thesis itself and studies on the unequal post industrial development of urban economies suggest that this is because the substitution thesis is conditional on the type of urban economy the empirical validity of this suggestion is tested by comparing the impact of immigration on the employment level of the less educated among 22 dutch metropolitan areas the findings corroborate the central hypothesis in strong service oriented urban economies the impact of immigration on unemployment levels is mitigated because of high labour demand for the less educated

how effective is redistribution under the social security benefit formula abstract this paper uses earnings histories from the social security administration linked to the survey responses for participants in the health and retirement study to investigate redistribution under the current social security benefit formula as advertised own benefits are significantly redistributed from individuals with high to those with low lifetime earnings however redistribution is roughly halved when spouse and survivor benefits are taken into account and redistribution is measured among families when families are arrayed by total earnings during years when both spouses are engaged in substantial work there is very little redistribution from families with high to low earnings capacity

trends in male labor force participation and retirement some evidence on the role of pensions and social security in the 1970 s and 1980 s this article estimates the effects of changes in pension plans and social security in the 1970s and 1980s on the steady state retirement of men work incentives associated with pension coverage and plan characteristics are calculated primarily from the 1969 79 retirement history study and the 1983 and 1989 surveys of consumer finances simulations with a structural retirement model suggest that the long run effects of changes in pension plans and social security account for about a quarter of the reduction in full time work by men in their early sixties but cannot explain the reduction by those age 65

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

unemployment market work and household production time diary data from four countries suggest that differences in market time between the unemployed and employed represent additional leisure not increased household production in areas where unemployment is cyclically high however reduced market work is offset by additional home production

new estimates of intertemporal substitution abstract this paper estimates the intertemporal elasticity of substitution for married males taking into account that many individuals are at a corner solution for weeks worked by virtue of working year round the fact that these individuals do not choose to engage in much intertemporal substitution may simply indicate that the corner solution inhibits their ability to do so rather than indicating a low desire to intertemporally substitute our estimates are able to distinguish between these two cases with the results showing much higher intertemporal elasticities of substitution than reported in earlier studies

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 trend in retirement a model with leisure production and endogenous retirement is used to explain declining labor force participation rates of elderly males the model is calibrated to cross sectional data on labor force participation rates of u s males by age their drop in consumption and leisure good expenditure share in 2000 running the calibrated model for the period 1850 2000 a prediction of the evolution of the cross section is obtained the model accounts for more than 87 of the increase in retirement of men over 65 the increase in retirement is driven by rising wages and falling prices of leisure goods

homework in labor economics household production and intertemporal substitution abstract we argue that estimates of intertemporal substitution elasticities obtained from standard life cycle models are subject to a downward bias because they neglect changes in work done at home over the life cycle we extend the standard life cycle model to include home production and estimate it using data from three time use surveys we find that the downward bias is large

consumption versus expenditure previous authors have documented a dramatic decline in food expenditures at the time of retirement we show that this is matched by an equally dramatic rise in time spent shopping for and preparing meals using a novel data set that collects detailed food diaries for a large cross section of u s households we show that neither the quality nor the quantity of food intake deteriorates with retirement status we also show that unemployed households experience a decline in food expenditure and food consumption commensurate with the impact of job displacement on permanent income these results highlight how direct measures of consumption distinguish between anticipated and unanticipated shocks to income whereas measures of expenditures obscure the distinction