Econometrica

Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Jan, 2024, Volume 92, Issue 1

Designing Disability Insurance Reforms: Tightening Eligibility Rules or Reducing Benefits?

https://doi.org/10.3982/ECTA19021
p. 79-110

Andreas Haller, Stefan Staubli, Josef Zweimüller

This paper develops a sufficient statistics framework for analyzing the welfare effects of disability insurance (DI). We derive social‐optimality conditions for the two main DI policy parameters: (i) eligibility rules and (ii) benefit levels. Applying this framework to two restrictive DI reforms in Austria, we find that tighter DI eligibility rules triggered higher fiscal cost savings and lower insurance losses. Hence, tighter DI eligibility rules dominate DI benefit reductions in scaling back the Austrian DI system.


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Supplemental Material

Supplement to "Designing Disability Insurance Reforms: Tightening Eligibility Rules or Reducing Benefits?"

Andreas Haller, Stefan Staubli, and Josef Zweimüller

This online appendix contains material not found within the manuscript.

Supplement to "Designing Disability Insurance Reforms: Tightening Eligibility Rules or Reducing Benefits?"

Andreas Haller, Stefan Staubli, and Josef Zweimüller

This zip file contains the replication files for the manuscript.