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Occupational Hazards and Social Disability Insurance

Author

Listed:
  • Amanda Michaud
  • David Wiczer

Abstract

Using retrospective data, we introduce evidence that occupational exposure significantly affects disability risk. Incorporating this into a general equilibrium model, social disability insurance (SDI) affects welfare through (i) the classic, risk-sharing channel and (ii) a new channel of occupational reallocation. Both channels can increase welfare, but at the optimal SDI they are at odds. Welfare gains from additional risk-sharing are reduced by overly incentivizing workers to choose risky occupations. In a calibration, optimal SDI increases welfare by 2.3% relative to actuarially fair insurance, mostly due to risk sharing.

Suggested Citation

  • Amanda Michaud & David Wiczer, 2017. "Occupational Hazards and Social Disability Insurance," Department of Economics Working Papers 17-11, Stony Brook University, Department of Economics.
    • Handle: RePEc:nys:sunysb:17-11
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    File URL: http://www.stonybrook.edu/commcms/economics/research/papers/2017/OccHaz_1711.pdf
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Occupational Hazards and Social Disability Insurance
      by Christian Zimmermann in NEP-DGE blog on 2017-11-04 02:18:29

    Citations

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    Cited by:

    1. Feng, Zhigang & Zhao, Kai, 2018. "Employment-based health insurance and aggregate labor supply," Journal of Economic Behavior & Organization, Elsevier, vol. 154(C), pages 156-174.
    2. Naoki Aizawa & Soojin Kim & Serena Rhee, 2025. "Labour Market Screening and the Design of Social Insurance: An Equilibrium Analysis of the Labour Market for the Disabled," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 92(1), pages 1-39.
    3. Noghanibehambari, Hamid & Bagheri, Hesamaldin & Toranji, Mostafa & Vu, Hoa & Tavassoli, Nasrin, 2025. "Womb to wisdom: Early-life exposure to midwifery laws and later-life disability," Social Science & Medicine, Elsevier, vol. 372(C).
    4. David Wiczer & Amanda Michaud, 2017. "The Disability Option: Labor Market Dynamics with Macroeconomic and Health Risks," 2017 Meeting Papers 1459, Society for Economic Dynamics.
    5. Hamish Low & Luigi Pistaferri, 2019. "Disability Insurance: Error Rates and Gender Differences," Economics Series Working Papers 889, University of Oxford, Department of Economics.
    6. Spearing, Joe, 2025. "Workplace autonomy and mental health," Economics & Human Biology, Elsevier, vol. 56(C).
    7. Hamish Low & Luigi Pistaferri, 2020. "Disability Insurance: Theoretical Trade‐Offs and Empirical Evidence," Fiscal Studies, John Wiley & Sons, vol. 41(1), pages 129-164, March.
    8. Fatih Guvenen & Burhan Kuruscu & Satoshi Tanaka & David Wiczer, 2020. "Multidimensional Skill Mismatch," American Economic Journal: Macroeconomics, American Economic Association, vol. 12(1), pages 210-244, January.
    9. Shah Rome Khan & Muhammad Imran Khan & Dr. Sardar Javaid Iqbal Khan, 2023. "An Investigation into the Statistical Significance of Labor Force Longevity in Brick Kilns and Marble Industry: A Case Study of Peshawar," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 9(2), pages 679-688.
    10. Chaoran Chen & Zhigang Feng & Jiaying Gu, 2025. "Health, Health Insurance, And Inequality," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 66(1), pages 107-141, February.
    11. Jacobs, Lindsay, 2023. "Occupations, retirement, and the value of disability insurance," Journal of Public Economics, Elsevier, vol. 225(C).
    12. Michaud, Amanda & Nelson, Jaeger & Wiczer, David, 2018. "Vocational considerations and trends in Social Security Disability," The Journal of the Economics of Ageing, Elsevier, vol. 11(C), pages 41-51.
    13. Satoshi Tanaka & David Wiczer & Burhanettin Kuruscu & Fatih Guvenen, 2015. "Occupational Switching and Self-Discovery in the Labor Market," 2015 Meeting Papers 1181, Society for Economic Dynamics.
    14. Kim, Soojin & Rhee, Serena, 2018. "Measuring the effects of employment protection policies: Theory and evidence from the Americans with Disabilities Act," Labour Economics, Elsevier, vol. 54(C), pages 116-134.

    More about this item

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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