IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Financial work incentives for disability benefit recipients: Lessons from a randomized field experiment

Listed author(s):
  • Bütler, Monika
  • Deuchert, Eva
  • Lechner, Michael
  • Staubli, Stefan
  • Thiemann, Petra

Disabled insurance (DI) beneficiaries lose benefits if labor incomes exceed certain thresholds (so called cash-cliffs ). The high implicit taxation of employment income is considered one of the prime reasons for the low outflow from the disability insurance. This paper presents the results of the short-term evaluation of a conditional cash program that financially incentivizes work related reduction of disability benefits. A randomized group of DI beneficiaries receive the offer to claim a payment ( seed capital ) of up to CHF 72,000 (USD 71,000) if they take up or expand employment and reduce DI claims. Overall, interest in taking-up the financial incentive is low at only 3%. Increasing the size of the payment does not lead to higher take-up. Individuals close to cash-cliffs react more on seed capital but the overall magnitude is small. Our results suggest that work-disincentives imposed by cash-cliffs are unlikely the main driver for low employment and outflow from the Swiss disability insurance system, despite the fact that the partial disability insurance system generates a nonlinear budget set, and bunching behavior at cash-cliffs are observed prior implementation of seed capital.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: https://www.econstor.eu/bitstream/10419/100480/1/VfS_2014_pid_55.pdf
Download Restriction: no

Paper provided by Verein für Socialpolitik / German Economic Association in its series Annual Conference 2014 (Hamburg): Evidence-based Economic Policy with number 100480.

as
in new window

Length:
Date of creation: 2014
Handle: RePEc:zbw:vfsc14:100480
Contact details of provider: Web page: http://www.socialpolitik.org/
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. Beshears, John & Choi, James J. & Laibson, David & Madrian, Brigitte C., 2008. "How are preferences revealed?," Journal of Public Economics, Elsevier, vol. 92(8-9), pages 1787-1794, August.
  2. 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.
  3. Arie Kapteyn & James P. Smith & Arthur van Soest, 2009. "Work Disability, Work, and Justification Bias in Europe and the U.S," Working Papers wp207, University of Michigan, Michigan Retirement Research Center.
  4. David Stapleton Gina Livermore edited by Craig Thornton Bonnie ODay Robert R Weathers II Krista Harrison So ONeil Emily Sama Martin David Wittenburg Debra Wright, 2008. "Ticket to Work at the Crossroads A Solid Foundation with an Uncertain Future," Mathematica Policy Research Reports 1168edda51a747edbc836f517, Mathematica Policy Research.
  5. Jonathan Gruber, 2000. "Disability Insurance Benefits and Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 108(6), pages 1162-1183, December.
  6. repec:mpr:mprres:6153 is not listed on IDEAS
  7. repec:mpr:mprres:4154 is not listed on IDEAS
  8. Emmanuel Saez, 2010. "Do Taxpayers Bunch at Kink Points?," American Economic Journal: Economic Policy, American Economic Association, vol. 2(3), pages 180-212, August.
  9. Hamish Low & Luigi Pistaferri, 2010. "Disability Risk, Disability Insurance and Life Cycle Behavior," NBER Working Papers 15962, National Bureau of Economic Research, Inc.
  10. Frank, Richard G. & Lamiraud, Karine, 2009. "Choice, price competition and complexity in markets for health insurance," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 550-562, August.
  11. Robert R. Weathers II & Jeffrey Hemmeter, 2011. "The impact of changing financial work incentives on the earnings of Social Security Disability Insurance (SSDI) beneficiaries," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 30(4), pages 708-728, September.
  12. Marie, Olivier & Vall Castello, Judit, 2012. "Measuring the (income) effect of disability insurance generosity on labour market participation," Journal of Public Economics, Elsevier, vol. 96(1), pages 198-210.
  13. Annemiek Vuren & Daniel Vuuren, 2007. "Financial Incentives in Disability Insurance in the Netherlands," De Economist, Springer, vol. 155(1), pages 73-98, March.
  14. David Stapleton Gina Livermore Criag Thornton Bonnie ODay Robert R Weathers II Krista Harrison So ONeil Emily Sama Martin David Wittenburg Debra Wright, 2008. "Ticket to Work at the Crossroads A Solid Foundation with an Uncertain Future," Mathematica Policy Research Reports 700b9069e84340a3a705d1509, Mathematica Policy Research.
  15. repec:mpr:mprres:4739 is not listed on IDEAS
  16. 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.
  17. David H. Autor & Mark G. Duggan, 2007. "Distinguishing Income from Substitution Effects in Disability Insurance," American Economic Review, American Economic Association, vol. 97(2), pages 119-124, May.
  18. Staubli, Stefan, 2011. "The impact of stricter criteria for disability insurance on labor force participation," Journal of Public Economics, Elsevier, vol. 95(9-10), pages 1223-1235, October.
  19. Monika Bütler & Lukas Inderbitzin & Jonathan F. Schulz & Stefan Staubli, 2012. "Die Auswirkungen bedarfsabhängiger Leistungen: Ergänzungsleistungen in der Schweiz," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 13(3), pages 179-195, 08.
  20. Andreas Ravndal Kostol & Magne Mogstad, 2014. "How Financial Incentives Induce Disability Insurance Recipients to Return to Work," American Economic Review, American Economic Association, vol. 104(2), pages 624-655, February.
  21. repec:mpr:mprres:6135 is not listed on IDEAS
  22. Craig Thornton & Gina Livermore & David Stapleton & John Kregel & Tim Silva & Bonnie O'Day & Thomas Fraker & W. Grant Revell & Jr. & Heather Schroeder & Meredith Edwards, "undated". "Evaluation of the Ticket to Work Program: Initial Evaluation Report," Mathematica Policy Research Reports 8c1605c49dfc43dfa0d23dce4, Mathematica Policy Research.
  23. Michele Campolieti, 2004. "Disability Insurance Benefits and Labor Supply: Some Additional Evidence," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 863-890, October.
  24. repec:mpr:mprres:3883 is not listed on IDEAS
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:zbw:vfsc14:100480. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.