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Labor Supply, Disability Benefits and Mental Illness

Author

Listed:
  • Susan Averett

    () (Economics Department, Lafayette College)

  • Richard Warner

    () (Mental Health Center of Boulder County)

  • Jani Little

    () (Institute of Behavioral Science Data Analysis Center, University of Colorado)

  • Peter Huxley

    () (School of Psychiatry and Behavioural Sciences, University of Manchester)

Abstract

In this paper we build and estimate a structural labor supply model that explicitly models the budget constraint facing mentally ill individuals eligible for SSI benefits. Our results suggest that the labor supply behavior of this group is not very responsive to wage changes. This suggests that it may be non-economic factors that drive labor supply behavior of this group. Our structural model allows for policy simulations. These simulations indicate that raising the implicit tax rate on earnings of subsidizing wages may increase labor supply among this group, albeit by modest amounts.

Suggested Citation

  • Susan Averett & Richard Warner & Jani Little & Peter Huxley, 1999. "Labor Supply, Disability Benefits and Mental Illness," Eastern Economic Journal, Eastern Economic Association, vol. 25(3), pages 279-288, Summer.
  • Handle: RePEc:eej:eeconj:v:25:y:1999:i:3:p:279-288
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    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume25/V25N3P279_288.pdf
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    References listed on IDEAS

    as
    1. Steve J. Davis & John Haltiwanger, 1991. "Wage Dispersion Between and Within U.S. Manufacturing Plants, 1963-1986," NBER Working Papers 3722, National Bureau of Economic Research, Inc.
    2. Bound, John & Johnson, George, 1992. "Changes in the Structure of Wages in the 1980's: An Evaluation of Alternative Explanations," American Economic Review, American Economic Association, vol. 82(3), pages 371-392, June.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Michele Campolieti & Morley Gunderson & Harry Krashinsky, 2007. "Labor Supply Decisions of Disabled Male Workers," Journal of Labor Research, Springer, vol. 28(3), pages 502-514, July.
    2. Judith A. Cook & Jane K. Burke-Miller & Dennis D. Grey, 2015. "Impact of Contingent Work on Subsequent Labor Force Participation and Wages of Workers with Psychiatric Disabilities," Mathematica Policy Research Reports dc9fe635fb3940d6a5740964f, Mathematica Policy Research.
    3. Judith A. Cook & Jane K. Burke-Miller & Dennis D. Grey, 2015. "Reasons for Job Separations Among People with Psychiatric Disabilities," Mathematica Policy Research Reports daa83bfb114348c39b9966d28, Mathematica Policy Research.
    4. repec:mpr:mprres:f04e33e27f994275b99d5fde53a20f57 is not listed on IDEAS

    More about this item

    Keywords

    Disability; Labor Supply; Policy;

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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