AEA Papers and Proceedings · 2018 · 10 citations · 10 references
Public AffairsEconomicsInsuranceDisability InsuranceDisability PolicyLabor EconomicsBehavioral Labor EconomicsEmployee BenefitsEmployer IncentivesReturn-to-work SupportWelfare ReformWork IncentivesDisability Benefit ReformDisability Employment IncentivesDisability Insurance ReformLabor Force Participation RatesLabor Supply AnalysisLabor Supply IncentivesWage IncentivesWork Disincentives
Return-to-work policies in disability insurance (DI) programs allow beneficiaries to collect a portion of their benefits while working. I investigate whether a large increase in incentives to work in a return-to-work policy could induce benefit recipients to increase their labor supply. I quantify the effects on earnings and labor force participation using a sharp discontinuity in the induced incentives to work at the month of the policy change in a DI program in Canada. Using administrative data, I document that large incentives to work could induce beneficiaries to increase their labor supply both in intensive and extensive margins.
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