Disability Benefits, Consumption Insurance, and Household Labor Supply

By David H. Autor, A. Kostøl, Magne Mogstad, Bradley Setzler. The American Economic Review, 2019

136 citations recorded by the source corpus.

There is no evaluation of the consequences of Disability Insurance (DI) receipt that captures the effects on households’ net income and consumption expenditure, family labor supply, or benefits from other programs. Combining detailed register data from Norway with an instrumental variables approach based on random assignment to appellant judges, we comprehensively assess how DI receipt affects these understudied outcomes. To consider the welfare implications of the findings from this instrumental variables approach, we estimate a dynamic model of household behavior that translates employment, reapplication, and savings decisions into revealed preferences for leisure and consumption. The model-based results suggest that on average, the willingness to pay for DI receipt is positive and sizable. Because spousal labor supply strongly buffers the household income and consumption effects of DI allowances, the estimated willingness to pay for DI receipt is smaller for married than single applicants. (JEL D12, D14, H55, I38, J14, J22)

Subfields: Demography, Gender Studies, General Health Professions

View Paper: https://www.semanticscholar.org/paper/e0cb5010ed9ccf90d2be157332670da2c9deec4e

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Citations in the corpus

Stock Market Returns and Consumption (2020, background): “More recently, Autor et al. (2017) and Kolsrud et al. (2017) use Norwegian and Swedish data to study the relation between disability insurance, unemployment insurance and household consumption.”
Incarceration, Recidivism, and Employment (2016, background): “3 Recent studies in economics isolating incapacitation effects include those by Owens (2009), Buonanno and Raphael (2013), and Barbarino and Mastrobuoni (2014). We refer to Chalfin and McCrary (2017) for a recent review of the extensive literature on criminal deterrence. 4 For example, Brennan and M”
MPC Heterogeneity and Household Balance Sheets (2016, unknown): “Other examples are Browning, Gørtz, and Leth-Petersen (2013); Leth-Petersen (2010); Autor et al. (2019); and Di Maggio, Kermani, and Majlesi (2020). Browning, Crossley, and Winter (2014) review the literature.”
Judging Judge Fixed Effects (2019, background): “, 2017), the effect of bankruptcy on firm outcomes (Chang and Schoar, 2013), the effect of foster care on child outcomes (Doyle, 2007, 2008), the effect of disability on labor supply, mortality, and intergenerational welfare use (Maestas et al., 2013; Dahl et al., 2014; Autor et al., 2017; Black et ”