Publication type: Working paper – expertise – study
Title: Disability insurance benefits and labor supply choices : evidence from a discontinuity in benefit awards
Authors: Müller, Tobias
Boes, Stefan
et. al: No
Extent: 39
Issue Date: 2016
Series: MPRA Paper
Series volume: 70957
Publisher / Ed. Institution: Munich Personal RePEc Archive
Language: English
Subject (DDC): 360: Social problems and social insurance
Abstract: This paper explores the effects of disability insurance (DI) benefits on the labor market decision of existing DI beneficiaries using a fuzzy regression discontinuity (RD) design. We identify the effect of DI benefits on the decision of working full-time, part-time or staying out of the labor force by exploiting a discontinuity in the DI benefit award rate above the age of 55. Overall, our results suggest that the Swiss DI system creates substantial lock-in effects which heavily influence the labor supply decision of existing beneficiaries: the benefit receipt increases the probability of working part-time by about 41%-points, decreases the probability of working full-time by about 42%-points but has little or no effects on the probability of staying out of the labor force for the average beneficiary. Therefore, DI benefits induce a shift in the labor supply of existing beneficiaries in the sense that they reduce their work intensity from working full-time to part-time which adds a possible explanation for the low DI outflow observed all across the OECD.
License (according to publishing contract): Licence according to publishing contract
Departement: School of Management and Law
Organisational Unit: Center for Energy and Environment (CEE)
Appears in collections:Publikationen School of Management and Law

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