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Removing Disability Insurance Coverage: The Effects on Work Incentive and Occupation Choice

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  • Atsuko Tanaka

    (University of Calgary)

  • Hsuan-Chih (Luke) Lin
  • Ha Nguyen

Abstract

This paper studies how removing disability insurance coverage affects workers' work incentive and occupation choice. To do so, we exploit the 1997 Canadian Pension Plan (CPP) disability program reform, which required longer work experience for individuals to be eligible for disability insurance. The empirical strategy includes difference-in-difference and triple-difference estimations. The results show that the reform significantly increased work incentive for male individuals with a long non-employment spell. However, the rise in work incentive increased only unemployment, not employment. We also find that the reform barely affected the distribution of employment across occupation.

Suggested Citation

  • Atsuko Tanaka & Hsuan-Chih (Luke) Lin & Ha Nguyen, "undated". "Removing Disability Insurance Coverage: The Effects on Work Incentive and Occupation Choice," Working Papers 2016-37, Department of Economics, University of Calgary, revised 10 Jul 2016.
  • Handle: RePEc:clg:wpaper:2016-37
    as

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    File URL: https://econ.ucalgary.ca/sites/econ.ucalgary.ca.manageprofile/files/unitis/publications/1-7341107/TanakaHaLin16_June21.pdf
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    References listed on IDEAS

    as
    1. Lin, Zhengxi, 1998. "Employment Insurance in Canada: Recent Trends and Policy Changes," Analytical Studies Branch Research Paper Series 1998125e, Statistics Canada, Analytical Studies Branch.
    2. David H. Autor & Mark G. Duggan, 2003. "The Rise in the Disability Rolls and the Decline in Unemployment," The Quarterly Journal of Economics, Oxford University Press, vol. 118(1), pages 157-206.
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    9. Veronica Grembi & Tommaso Nannicini & Ugo Troiano, 2011. "Policy Responses to Fiscal Restraints: A Difference-in-Discontinuities Design," Working Papers 397, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
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    13. Campolieti, Michele & Riddell, Chris, 2012. "Disability policy and the labor market: Evidence from a natural experiment in Canada, 1998–2006," Journal of Public Economics, Elsevier, vol. 96(3), pages 306-316.
    14. Robert H. Topel & Michael P. Ward, 1992. "Job Mobility and the Careers of Young Men," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 439-479.
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