Economic Incentives, Disability Insurance and Labor Supply

46 Pages Posted: 23 Apr 2018 Last revised: 21 Oct 2018

See all articles by Ragnar Alne

Ragnar Alne

University of Bergen - Department of Economics

Date Written: October 17, 2018

Abstract

Using a difference-in-difference model on full population data, I estimate the labor market responses following a 2015 Norwegian disability insurance (DI) reform. The reform introduced an incentive program to encourage DI beneficiaries to increase their labor supply, and I find that the program significantly increased the average working hours and modestly affected the labor market participation of DI beneficiaries. There is significant heterogeneity in the estimated effects; young DI beneficiaries increased both the intensive and the extensive labor market participation. The analysis accentuates the importance of analyzing the intensive labor market response when evaluating the effects of DI reforms.

Keywords: Disability insurance reform, labor supply, economic incentives, difference-in-difference, labor economics

JEL Classification: D60, H53, I38, J08, J22

Suggested Citation

Alne, Ragnar, Economic Incentives, Disability Insurance and Labor Supply (October 17, 2018). Available at SSRN: https://ssrn.com/abstract=3162157 or http://dx.doi.org/10.2139/ssrn.3162157

Ragnar Alne (Contact Author)

University of Bergen - Department of Economics ( email )

Fosswinckelsgt. 6
N-5007 Bergen, 5007
Norway

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
69
Abstract Views
516
rank
361,091
PlumX Metrics