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The Economic Implications of Public Disability Insurance in the United States

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Author Info
Danzon, Patricia M

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Abstract

A review of previous analyses of labor-supply effects of Social Security Disability Insurance concludes that estimates of labor-supply effects and net social costs are upward biased because they ignore interactions between disability insurance and other insurances. A model of optimal insurance, postinjury accommodations, and labor supply shows that reduction in labor supply and increase in consumption when disabled do not necessarily imply moral hazard. Optimal postinjury accommodations vary inversely with firm size. The Americans with Disabilities Act will reduce wages and labor supply of healthy workers, particularly in small firms. Effects on labor supply of the disabled are ambiguous. Copyright 1993 by University of Chicago Press.

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File URL: http://links.jstor.org/sici?sici=0734-306X%28199301%2911%3A1%3CS170%3ATEIOPD%3E2.0.CO%3B2-%23&origin=repec
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Publisher Info
Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 11 (1993)
Issue (Month): 1 (January)
Pages: S170-200
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Handle: RePEc:ucp:jlabec:v:11:y:1993:i:1:p:s170-200

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  1. Michele Campolieti & John N. Lavis, 2000. "Disability Expenditures in Canada, 1970-1996: Trends, Reform Efforts and a Path for the Future," Canadian Public Policy, University of Toronto Press, vol. 26(2), pages 241-164, June. [Downloadable!] (restricted)
  2. Herbert Emery & Cara L. Brown, 2008. "The Impact of Disability on Earnings and Labour Force Participation in Canada: Evidence from the 2001 PALS," Working Papers 2008-26, Department of Economics, University of Calgary, revised 27 Jan 2008. [Downloadable!]
  3. Burkhauser, Richard V. & Butler, J. S. & Gulcin Gumus, 2003. "Dynamic Modeling of the SSDI Application Timing Decision: The Importance of Policy Variables," IZA Discussion Papers 942, Institute for the Study of Labor (IZA). [Downloadable!]
  4. Derek Hum & Wayne Simpson, 1996. "Canadians with Disabilities and the Labour Market," Canadian Public Policy, University of Toronto Press, vol. 22(3), pages 287-299, September. [Downloadable!] (restricted)
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