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Disability, earnings, income and consumption

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  • Meyer, Bruce D.
  • Mok, Wallace K.C.

Abstract

We study the well-being of disabled men and the economic benefits of disability insurance. Using longitudinal data for 1968–2015 for male household heads, we determine the prevalence of working-age disability, its association with a wide range of economic outcomes including, earnings, income, poverty, consumption, wealth and time-use. We disaggregate disabled men based on the persistence and severity of work-limiting conditions, and find that disability is common and associated with poor economic outcomes. The outcomes differ sharply by disability group. We then provide the range of behavioral elasticities and preference parameters consistent with current disability compensation being optimal in the Baily-Chetty framework.

Suggested Citation

  • Meyer, Bruce D. & Mok, Wallace K.C., 2019. "Disability, earnings, income and consumption," Journal of Public Economics, Elsevier, vol. 171(C), pages 51-69.
    • Handle: RePEc:eee:pubeco:v:171:y:2019:i:c:p:51-69
    DOI: 10.1016/j.jpubeco.2018.06.011
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