Do self-insurance and disability insurance prevent consumption loss on disability?
AbstractIn this paper we show the extent to which public insurance and self-insurance mitigate the cost of health shocks that limit the ability to work. We use consumption data from the UK to estimate the insurance provided by the government disability programme and account for the effectiveness of alternative self-insurance mechanisms. Individuals with a work-limiting health condition, but in receipt of disability insurance, have 7 percent lower consumption than those without such a condition. Self-insurance through savings and a working partner each provide some insurance benefit, improving outcomes from 2 percent to 4 percent. Reductions in the generosity of incapacity benefit after 1995 are associated with increases in the consumption loss associated with disability.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Board of Governors of the Federal Reserve System (U.S.) in its series Finance and Economics Discussion Series with number 2009-31.
Date of creation: 2009
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-08-02 (All new papers)
- NEP-HEA-2009-08-02 (Health Economics)
- NEP-IAS-2009-08-02 (Insurance Economics)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Bruce D. Meyer & Wallace K. C. Mok, 2006.
"Disability, Earnings, Income and Consumption,"
0610, Harris School of Public Policy Studies, University of Chicago.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kris Vajs).
If references are entirely missing, you can add them using this form.