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Return-to-Work Policies and Labor Supply in Disability Insurance Programs


  • Arezou Zaresani


Return-to-work policies in disability insurance (DI) programs allow beneficiaries to collect a portion of their benefits while working. I investigate whether a large increase in incentives to work in a return-to-work policy could induce benefit recipients to increase their labor supply. I quantify the effects on earnings and labor force participation using a sharp discontinuity in the induced incentives to work at the month of the policy change in a DI program in Canada. Using administrative data, I document that large incentives to work could induce beneficiaries to increase their labor supply both in intensive and extensive margins.

Suggested Citation

  • Arezou Zaresani, 2018. "Return-to-Work Policies and Labor Supply in Disability Insurance Programs," AEA Papers and Proceedings, American Economic Association, vol. 108, pages 272-276, May.
  • Handle: RePEc:aea:apandp:v:108:y:2018:p:272-76
    Note: DOI: 10.1257/pandp.20181047

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    Cited by:

    1. Zaresani, Arezou & Olivo-Villabrille, Miguel, 2022. "Return-to-work policies’ clawback regime and labor supply in disability insurance programs," Labour Economics, Elsevier, vol. 78(C).
    2. Zaresani, Arezou, 2020. "Adjustment cost and incentives to work: Evidence from a disability insurance program," Journal of Public Economics, Elsevier, vol. 188(C).
    3. Chiara Dal Bianco, 2023. "Disability Insurance and the Effects of Return-to-work Policies," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 49, pages 351-373, July.
    4. Tunga Kantarcı & Jan‐Maarten van Sonsbeek & Yi Zhang, 2023. "The heterogeneous impact of stricter criteria for disability insurance," Health Economics, John Wiley & Sons, Ltd., vol. 32(9), pages 1898-1920, September.

    More about this item

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth


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