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The Effect of Disability Insurance Receipt on Labor Supply

French, E; Song, J; (2014) The Effect of Disability Insurance Receipt on Labor Supply. American Economic Journal: Economic Policy , 6 (2) pp. 291-337. 10.1257/pol.6.2.291. Green open access

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Abstract

This paper exploits the effectively random assignment of judges to Disability Insurance cases to estimate the causal impact of Disability Insurance receipt on labor supply. We find that benefit receipt reduces labor force participation by 26 percentage points three years after a disability determination decision, although the reduction is smaller for older people, college graduates, and those with mental illness. OLS and instrumental variables estimates are similar. Furthermore, over 60 percent of those denied benefits by an administrative law judge are subsequently allowed benefits within ten years, showing that most applicants apply, reapply, and appeal until they get benefits.

Type: Article
Title: The Effect of Disability Insurance Receipt on Labor Supply
Open access status: An open access version is available from UCL Discovery
DOI: 10.1257/pol.6.2.291
Publisher version: http://dx.doi.org/10.1257/pol.6.2.291
Language: English
Additional information: Copyright © 2018 AEA. This version is the version of record. For information on re-use, please refer to the publisher’s terms and conditions.
Keywords: Social Sciences, Economics, Business & Economics, Instrumental Variable Estimation, Health, Applicants, Earnings, Models, Identification, Program, Growth, Care
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/1408327
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