NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Bradley J. Setzler

Department of Economics
University of Chicago
1126 East 59th Street
Chicago, IL 60637

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NBER Working Papers and Publications

June 2017Disability Benefits, Consumption Insurance, and Household Labor Supply
with David Autor, Andreas Ravndal Kostol, Magne Mogstad: w23466
While a mature literature finds that Disability Insurance (DI) receipt discourages work, the welfare implications of these findings depend on two rarely studied economic quantities: the full cost of DI allowances to taxpayers, summing over DI transfer payments, benefit substitution to or from other transfer programs, and induced changes in tax receipts; and the value that individuals and families place on receiving benefits in the event of disability. We comprehensively assess these missing margins in the context of Norway's DI system, drawing on two strengths of the Norwegian environment. First, Norwegian register data allow us to characterize the household impacts and fiscal costs of disability receipt by linking employment, taxation, benefits receipt, and assets at the person and househ...
 
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