Disability Insurance and the Effects of Return-to-Work Policies (Updated December 14, 2022): Social Sciences

2022 DEC 22 (NewsRx) -- By a News Reporter-Staff News Editor at NewsRx Science Daily -- According to news reporting based on a preprint abstract, our journalists obtained the following quote sourced from osf.io:

“I provide a quantitative assessment of the labor market and welfare effects of return- to-work policies targeted at disability insurance (DI) recipients by estimating a life- cycle model in which individuals with different health evolving over time choose con- sumption, labor supply, and DI application. I ?nd that a wage subsidy incentivizing return to work is welfare improving, and the willingness to pay for such reform is in- creasing in sickness and decreasing in wealth.

“This policy increases labor force par- ticipation of DI bene?ciaries by 4.6 percentage points, and decreases the DI rate by 5.7 percentage points.

“A policy mandating yearly eligibility reassessment with a 10% probability would decrease the welfare of individuals in bad health and worse economic condition, and force about 30% of the bene?ciaries to exit the program, 54% of whom would return to work.”

This preprint has not been peer-reviewed.

For more information on this research see: http://osf.io/preprints/socarxiv/pj8d9/

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