Behavioural Responses to Disability Insurance Generosity in a Work-Compatibility Setting

Arbeitspapier

We investigate behavioral responses to the generosity of Disability Insurance (DI) within the context of work compatibility. Exploiting an institutional discontinuity leading to exogenous variation in replacement rates, we use rich administrative data on the work and health histories of Italian private sector workers and focus on individuals impacted by acute CVD shocks leading to unplanned hospitalizations. Using a Regression Discontinuity strategy, we identify a substantial DI response to benefit generosity, suggesting an elasticity of DI participation of 1.26. Additionally, we observe a smaller employment response, with an estimated elasticity of -0.15. Our findings indicate that the receipt of DI is widely perceived as a complement to labour income within a framework of work compatibility. These results carry significant implications for the design of labour-inclusive DI scheme.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 16819

Classification and Topics

• Classification: Wirtschaft ; Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs ; Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination ; Time Allocation and Labor Supply ; Social Security and Public Pensions
• Subject: disability insurance ; elasticity ; replacement rate ; labour supply ; regression discontinuity

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Zantomio, Francesca ; Belloni, Michele ; Carrieri, Vincenzo ; Farina, Elena ; Simonetti, Irene
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2024

Further information

• Last update: 10.03.2025, 11:43 AM CET