Tax Rates and Work Incentives in the Social Security Disability Insurance Program: Current Law and Alternative Reforms
AbstractThis paper examines the work incentives in the Social Security Disability Insurance (SSDI) Program under current law and proposed reforms. We begin with a discussion of the expected effect of the program on work effort according to the basic static labor supply model. In addition, we provide a numerical simulation that shows the magnitude of the monetary incentives provided by current law and the reforms for different categories of individuals. We find that the proposed reforms have ambiguous effects on work effort and could, contrary to perceived wisdom, possibly reduce work effort and increase the number of SSDI recipients.
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Bibliographic InfoArticle provided by National Tax Association in its journal National Tax Journal.
Volume (Year): 52 (1999)
Issue (Month): n. 4 (December Citation: 52 National Tax Journal 623-54 (December 1999))
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- Nicole Maestas & Kathleen J. Mullen & Gema Zamarro, 2012. "Induced Entry into the Social Security Disability Program: Using Past SGA Changes as a Natural Experiment," Working Papers wp262, University of Michigan, Michigan Retirement Research Center.
- Andreas Ravndal Kostøl & Magne Mogstad, 2012.
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- Andreas Ravndal Kostøl & Magne Mogstad, 2013. "How Financial Incentives Induce Disability Insurance Recipients to Return to Work," NBER Working Papers 19016, National Bureau of Economic Research, Inc.
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