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Author: | Gruber, J. Kubik, J. D. |
Title: | Disability insurance rejection rates and the labor supply of older workers |
Journal: | Journal of Public Economics
1997 : APR, VOL. 64:1, p. 1-23 |
Index terms: | INSURANCE DISABLEMENT LABOUR SUPPLY OLDER WORKERS MORAL HAZARD |
Language: | eng |
Abstract: | This paper examines the denial rate for initial disability insurance (DI) applications by exploiting the large rise in denial rates across the United States in the late 1970s. It was found that increased denial rates led to decreases in labor force non-participation, suggesting that there is moral hazard involved with the imperfect targeting of DI. It was also found that the increase in work incentives appears to have been efficiently targeted to the more able portion of the older male population. Conditional on the same mean labor force incentive effect as other policies, denial rate increases may be a particularly desirable means of reducing the moral hazard problems induced with DI. |
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