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Labour Supply and Welfare Effects of Disability Insurance: A Survey

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  • Chiara Dal Bianco

    (University of Padua)

Abstract

This paper provides an overview of the labour supply disincentive and the insurance effect of public disability insurance (DI) programmes targeted to permanently disabled adults. It builds on previous survey papers to review the empirical findings on the direction and magnitude of the DI effects on labour market participation. It particularly focuses on the consequences of altering specific parameters of the DI schemes, such as benefit amount, screening stringency and return-to-work incentives. Finally, it surveys the recent literature investigating the level of insurance against work-limiting health impairments provided by DI programmes and the value of DI for beneficiaries. This literature is of particular relevance in a period in which many countries are facing the challenge of reforming DI schemes to guarantee their sustainability.

Suggested Citation

  • Chiara Dal Bianco, 2019. "Labour Supply and Welfare Effects of Disability Insurance: A Survey," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 5(1), pages 161-189, March.
  • Handle: RePEc:spr:italej:v:5:y:2019:i:1:d:10.1007_s40797-019-00086-z
    DOI: 10.1007/s40797-019-00086-z
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    References listed on IDEAS

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    1. Philip de Jong & Maarten Lindeboom & Bas van der Klaauw, 2011. "Screening Disability Insurance Applications," Journal of the European Economic Association, European Economic Association, vol. 9(1), pages 106-129, February.
    2. Philippe Ruh & Stefan Staubli, 2019. "Financial Incentives and Earnings of Disability Insurance Recipients: Evidence from a Notch Design," American Economic Journal: Economic Policy, American Economic Association, vol. 11(2), pages 269-300, May.
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    8. Gruber, Jonathan & Kubik, Jeffrey D., 1997. "Disability insurance rejection rates and the labor supply of older workers," Journal of Public Economics, Elsevier, vol. 64(1), pages 1-23, April.
    9. Bound, John & Burkhauser, Richard V., 1999. "Economic analysis of transfer programs targeted on people with disabilities," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 51, pages 3417-3528, Elsevier.
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    16. John Bound & Timothy Waidmann, 1992. "Disability Transfers, Self-Reported Health, and the Labor Force Attachment of Older Men: Evidence from the Historical Record," The Quarterly Journal of Economics, Oxford University Press, vol. 107(4), pages 1393-1419.
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    Cited by:

    1. Jack Britton & Eric French, 2020. "Health and Employment amongst Older Workers," Fiscal Studies, John Wiley & Sons, vol. 41(1), pages 221-250, March.

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    More about this item

    Keywords

    Disability insurance; Labour supply; Health; Welfare;
    All these keywords.

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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