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The effect of disability insurance receipt on labor supply

Author

Listed:
  • Eric French
  • Jae Song

Abstract

This paper estimates the effect of the Disability Insurance program on labor supply. We find that 30% of denied applicants and 15% of allowed applicants work several years after a disability determination decision. The earnings elasticity with respect to the after tax wage is 0.8. However, the labor supply of those over age 55, college graduates, and those with mental illness is not sensitive to allowance of benefits.

Suggested Citation

  • Eric French & Jae Song, 2009. "The effect of disability insurance receipt on labor supply," Working Paper Series WP-09-05, Federal Reserve Bank of Chicago.
    • Handle: RePEc:fip:fedhwp:wp-09-05
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Disability insurance; Labor supply;

    JEL classification:

    • 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
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

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