Welfare programs and motivation bias of social workers
This paper studies optimal disability and welfare benets with imperfect disability tagging. Labor supply is aected by the levels of both disability and welfare benets. The tagging process is implemented by social workers that may have some altruism toward claimants. All the individuals that are not working are eligible for welfare benets. We analyze the optimal structure of benets and the implications of a reform aimed at raising the standard for being eligible for disability benets.
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