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Krekó Judit és szerzőtársai tanulmánya megjelent a Labour Economics szakfolyóiratban

 

Take-up and labor supply responses
to disability insurance earnings limits

 
Judit Krekó, Dániel Prinz, Andrea Weber

 

Labour Economics, Available online 7 June 2024

 

Highlights

Earnings limits create a trade-off between their screening and distortionary effect.

We study a policy in Hungary that reduced the earnings limit for new DI beneficiaries.

Decrease in the earnings limit had a small impact on selection into the program.

The policy reduced labor supply on the intensive margin significantly.

Reduced labor supply is driven by beneficiaries with higher pre-disability earnings.

 

Abstract

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 use a reduction in the earnings limit in Hungary to evaluate this trade-off and examine screening and labor supply responses. We find that the policy changed selection into the program modestly but reduced labor supply on the intensive margin significantly. These findings suggest that the earnings threshold should be higher.

Keywords: Disability insurance; Labor supply; policy analysis; earnings limit; Disability benefit; Welfare

 

 

 

2024

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25

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