Asset Accumulation and Labor Force Participation of Disability Insurance Applicants
Harvard University - Technology & Operations Management Unit
July 15, 2013
Harvard Business School Technology & Operations Mgt. Unit Working Paper No. 14-008
Using panel data from the RAND Health and Retirement Study, I show that rejected applicants for Social Security Disability Insurance (SSDI) possess significantly more assets immediately prior to their application and exhibit lower labor force attachment than accepted applicants. These findings are consistent with the theoretical prediction that disability insurance may encourage individuals to save more in the present and plan to apply for disability benefits in the future, regardless of the state of their future health. Because the current empirical literature does not account for this intertemporal channel, it may underestimate the total work disincentive effect of SSDI.
Number of Pages in PDF File: 51
Keywords: Disability insurance, asset accumulation, labor force participation
JEL Classification: H55, J22, H31working papers series
Date posted: August 8, 2013
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo5 in 9.579 seconds