Income and substitution effects of a disability insurance reform

• 成果类型: Article
• 署名作者: Deuchert, Eva; Eugster, Beatrix
• 署名单位: University of Fribourg; University of St Gallen
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2018.12.001
• 发表日期: 2019
• 页码: 1-14
• 关键词: Disability insurance; Work disincentives; Income and substitution effects; Partial benefit system

摘要

Disability insurance (DI) systems are widely criticized for their inherent work disincentives. This paper evaluates the effects of a Swiss DI reform that aims to lower DI benefits for a group of existing DI beneficiaries and introduces an additional level to the DI benefit schedule. The reform has only modest effects on earnings and employment but increases the disability degree of those threatened by a DI benefit decline. We estimate bounds on the income and substitution effects by employing the principal stratification framework. The income effect is quantitatively important, whereas the substitution effect is smaller and has bounds that include zero. The evidence suggests that caseworkers helped the insured with low labor market attachment to maintain a full DI benefit. (C) 2018 The Authors. Published by Elsevier B.V.