Disability risk, disability insurance and life cycle behavior
By: Hamish Low, Luigi Pistaferri
Contributors: Pistaferri, Luigi; National Bureau of Economic Research
Series: NBER working paper series -- working paper 15962; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 15962.
Publisher: National Bureau of Economic Research
Published: 2010
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Description: "This paper provides a life-cycle framework for weighing up the insurance value of disability benefits against the incentive cost.  Within this framework, we estimate the life-cycle risks that individuals face in the US, as well as the parameters governing the disability insurance program, using indirect inference and longitudinal data on consumption, disability status, disability insurance receipt, and wages.  We use our estimates to characterize the economic effects of disability programs and to consider how policy reforms would affect behaviour and standard measures of household welfare.  Because of high levels of false rejections associated with the screening problem, average household welfare increases as the program becomes less strict, despite the worsening incentives that this implies.  Incentives for false applications are reduced by reducing generosity and increasing reassessments and these policies also increase average household welfare, despite the worse insurance implied"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 5/11/2010.

Includes bibliographical references.

Also available in print.

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Mode of access: World Wide Web.