scholarly journals How Financial Incentives Induce Disability Insurance Recipients to Return to Work

2014 ◽  
Vol 104 (2) ◽  
pp. 624-655 ◽  
Author(s):  
Andreas Ravndal Kostøl ◽  
Magne Mogstad
Keyword(s):  
Return To Work ◽  
Financial Incentives ◽  
Disability Insurance ◽  
Disposable Income ◽  
Randomized Experiment ◽  
Work Incentives ◽  
Sharp Discontinuity ◽  
Program Costs

Using a local randomized experiment that arises from a sharp discontinuity in Disability Insurance (DI) policy in Norway, we provide transparent and credible identification of how financial incentives induce DI recipients to return to work. We find that many DI recipients have considerable capacity to work that can be effectively induced by providing financial work incentives. We further show that providing work incentives to DI recipients may both increase their disposable income and reduce program costs. Our findings also suggest that targeted policies may be the most effective in encouraging DI recipients to return to work. (JEL D14, H55, J14, J22, J28)

scholarly journals Return-to-Work Policies and Labor Supply in Disability Insurance Programs

2018 ◽  
Vol 108 ◽  
pp. 272-276
Author(s):  
Arezou Zaresani
Keyword(s):  
Return To Work ◽  
Labor Supply ◽  
Labor Force ◽  
Administrative Data ◽  
Policy Change ◽  
Labor Force Participation ◽  
Disability Insurance ◽  
Sharp Discontinuity

Return-to-work policies in disability insurance (DI) programs allow beneficiaries to collect a portion of their benefits while working. I investigate whether a large increase in incentives to work in a return-to-work policy could induce benefit recipients to increase their labor supply. I quantify the effects on earnings and labor force participation using a sharp discontinuity in the induced incentives to work at the month of the policy change in a DI program in Canada. Using administrative data, I document that large incentives to work could induce beneficiaries to increase their labor supply both in intensive and extensive margins.

scholarly journals Earnings, Disposable Income, and Consumption of Allowed and Rejected Disability Insurance Applicants

2015 ◽  
Vol 105 (5) ◽  
pp. 137-141 ◽  
Author(s):  
Andreas Ravndal Kostøl ◽  
Magne Mogstad
Keyword(s):  
Panel Data ◽  
Disability Insurance ◽  
Disposable Income ◽  
Data Set ◽  
Insurance Program ◽  
Norwegian Population ◽  
Before And After ◽  
Empirical Approaches ◽  
Key Questions

Two key questions in thinking about the size and growth of the disability insurance program are to what extent it discourages work, and how valuable the insurance is to individuals and families. These questions motivate our paper. We begin by describing the earnings, disposable income, and consumption of awarded and rejected DI applicants, before and after the disability onset and the allowance decision. Next, we discuss how these descriptive results can be interpreted through the lens of alternative empirical approaches. Our analysis uses a Norwegian population panel data set with detailed information about every individual and household.

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