Data from University of Melbourne Advance Knowledge in Public Economics (Adjustment Cost and Incentives To Work: Evidence From a Disability Insurance Program)

2020 SEP 30 (NewsRx) -- By a News Reporter-Staff News Editor at Politics, Law & Government Daily -- Data detailed on Economics - Public Economics have been presented. According to news reporting out of Melbourne, Australia, by NewsRx editors, the research stated, “How important is adjustment cost for individuals who face a change in work incentives induced by a policy change? I provide the first estimate of adjustment cost in the context of a Disability Insurance (DI) program by exploiting a policy change that increased work incentives by increasing the exemption threshold. I use bunching at the thresholds to estimate adjustment cost and earnings elasticity.”

Financial supporters for this research include University of Calgary, University of Melbourne.

Our news journalists obtained a quote from the research from the University of Melbourne, “The estimates of adjustment cost are quite sizeable and heterogeneous. The estimates of earnings elasticity, from both static and dynamic models, are larger than the elasticity estimated with no adjustment cost, suggesting that adjustment cost attenuates the responses to work incentives. Policies designed to increase labor supply will work if the work incentives are large enough to offset the adjustment cost.”

According to the news editors, the research concluded: “Accounting for adjustment cost then might explain the disparate findings on the effects of an increase in work incentives on the labor supply of beneficiaries of DI programs.”

For more information on this research see: Adjustment Cost and Incentives To Work: Evidence From a Disability Insurance Program. Journal of Public Economics, 2020;188():104223. Journal of Public Economics can be contacted at: Elsevier Science Sa, PO Box 564, 1001 Lausanne, Switzerland. (Elsevier - www.elsevier.com; Journal of Public Economics - http://www.journals.elsevier.com/journal-of-public-economics/)

Our news journalists report that additional information may be obtained by contacting Arezou Zaresani, University of Melbourne, Melbourne, Vic, Australia.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.jpubeco.2020.104223. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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