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Take-up and labor supply responses to disability insurance earnings limits
Title / Series / Name
Labour Economics
Publication Volume
89
Publication Issue
Pages
Author
Krekó, Judit
Prinz, Dániel
Weber, Andrea
Prinz, Dániel
Weber, Andrea
Editors
Keywords
Disability benefit
Disability insurance
Earnings limit
Labor supply
Policy analysis
Welfare
Economics and Econometrics
Organizational Behavior and Human Resource Management
Disability insurance
Earnings limit
Labor supply
Policy analysis
Welfare
Economics and Econometrics
Organizational Behavior and Human Resource Management
Files
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Weber-Andrea3_2024.pdf
Adobe PDF, 2.29 MB
URI
https://hdl.handle.net/20.500.14018/27257
Abstract
In most disability insurance programs beneficiaries lose some or all of their benefits if they earn above an earnings threshold. While intended to screen out applicants with high remaining working capacity, earnings limits can also distort the labor supply of beneficiaries. We use a reduction in the earnings limit in Hungary to evaluate this trade-off and examine screening and labor supply responses. We find that the policy changed selection into the program modestly but reduced labor supply on the intensive margin significantly. These findings suggest that the earnings threshold should be higher.
Topic
Publisher
Place of Publication
Type
Journal article
Date
2024-08-01
Language
ISBN
Identifiers
10.1016/j.labeco.2024.102583