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Erscheinungsjahr: 
2022
Schriftenreihe/Nr.: 
IZA Discussion Papers No. 15377
Verlag: 
Institute of Labor Economics (IZA), Bonn
Zusammenfassung: 
In most disability insurance programs beneficiaries lose some or all of their benefits if they earn above an earnings threshold. While intended to screen out applicants with high remaining working capacity, earnings limits can also distort the labor supply of beneficiaries. We develop a simple framework to evaluate this trade-off. We use a reduction in the earnings limit in Hungary to examine screening and labor supply responses. We find that the policy changed selection into the program modestly but reduced labor supply significantly. Viewed through the lens of our model, these findings suggest that the earnings threshold should be higher.
Schlagwörter: 
disability insurance
policy reform
earnings limit
labor supply
JEL: 
H53
H55
I38
J22
Dokumentart: 
Working Paper

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