Can changes in disability insurance work incentives influence beneficiary employment? Evidence from the promoting opportunity demonstration

Housing is a critical enabler of a dignified life, civic participation and the achievement of human rights. Providing appropriate housing for people who experience neurotrauma as a result of road or workplace injury, with both the assistive technology and human support required, continues however to be a policy and practice challenge. Australian and New Zealand motor accident, disability and injury insurers have high and enduring liability in this area, and their under-researched perspectives are needed to strengthen the evidence base for policy and practice development. This qualitative study utilised focus group methodology with representatives from government injury and disability insurers across Australia and New Zealand (n = 8). The study aimed to identify (a) issues and trends; (b) factors for decision making; and (c) service impacts relating to housing and support for people with disability and high daily support needs. Thematic analysis generated results across four key areas: influences on the decision to fund housing and/or support; identifying ‘good’ housing solutions; evaluating cost–benefit of housing and support investments; and developing future investment in housing and support. Findings such as those regarding decision-making, and investment, attest to the value of capturing the perspectives of this key group of stakeholders to assist to envision better housing and support for people with disability.

How to Integrate Disability Benefits into an Individual Account System: The Chilean Model

Using data from the Survey of Income and Program Participation (SIPP) matched to administrative records, we examine mortality risk and participation in the Disability Insurance (DI) and Supplemental Security Income (SSI) disability programs from a long-term perspective. Over a period of 14 years, we analyze the effect of self-reported health and disability on the probability of death and disability program entry among individuals aged 18–48 in 1984. We also assess DI and SSI programs from a life-cycle perspective. Self-reported poor health and severe disability at baseline are strongly correlated with death over the 14-year follow-up period. These variables also are strong predictors of disability program participation over the follow-up period among non-participants at baseline or before, with increasing marginal probabilities in the out-years. Our cross-sectional models are consistent with recent studies that find that the work-prevented measure is useful in modeling DI entry. However, once self-reported health and functional limitations are accounted for, the longitudinal entry models provide conflicting DI results for the work-prevented measure, suggesting that, contrary to claims based on cross-sectional or short-time horizon application models, the work-prevented measure is an unreliable indicator of severity. The risk of SSI and DI participation is significantly greater for individuals who die, suggesting that future mortality captures the effect of case severity and deterioration of health during the follow-up period. From a life-cycle perspective, a substantially greater proportion of individuals participate in SSI or DI at some point in their lives compared to typical cross-sectional estimates of participation, especially among minorities, people with less than a high school education, and those with early onset of poor health and/or disabilities. Cross-sectional estimates for the Social Security area population indicate SSI and DI participation rates of no more than 5% combined in 2000. In contrast, for individuals aged 43–48 in 1984, we observe a cumulative lifetime SSI and/or DI participation rate of 14%. The corresponding figure is 32% for individuals in that age group who did not graduate from high school, suggesting the need for human capital investments and/or improved work incentives.

In addition to traditional forms of private and public medical insurance, two other large public programs help pay for costs associated with ill health. In 2008, Workers’ Compensation (WC) insurance provided $57.6 billion in medical care and cash benefits to employees who are injured at work or contract a work‐related illness, and Social Security Disability Insurance (DI) provided $106 billion to individuals who suffer from permanent disabilities and are unable to engage in substantial gainful activity. During the 1990s, real DI outlays increased nearly 70 percent, whereas real WC cash benefit spending fell by 12 percent. There has been concern that part of this relationship between two of the nation’s largest social insurance programs may be due to individuals substituting toward DI as state WC policies tightened. We first show that this negative correlation between the national series does not hold over time within states, the level at which a causal relationship should operate. We then test for a causal effect of changes in WC enrollment on DI applications and new DI cases within states over time, using state policy (the maximum WC benefit) as an instrument for WC enrollment. Despite a strong first stage fit, we find no statistically significant evidence that WC tightening caused DI rolls to increase, although the standard errors are large enough that we cannot reject effects of substantial magnitude. We conclude it is unlikely that state WC changes were a meaningful factor in explaining the rise in DI during our study period of 1986–2001, although further study using individual level data is warranted.

Disability income insurance (DI) and its pricing in mainland China is discussed with a focus on the current situation, market prospects, and the pricing process. Our study concludes that (1) there is a bright future for commercial DI, but current consumers are mainly urban residents with above-average incomes; (2) by combining health service data and experiences of the insured, one can calculate the premium rate by sex, region, and occupation; and (3) the price of DI should be higher in rural areas than in cities; the commercial DI premium rate is overpriced for people under 45, and underpriced for people over 45.

Communitarian values are stronger in health insurance than in life or disability insurance. This correlates with increased tolerance for insurers' use of genetic information in disability insurance underwriting, which, in turn, is relevant to the scope and content of proposals to regulate such use.

Employers Opting Out of Public Disability Insurance: Selection or Incentive Effects?

Back to Work: Employment Effects of Tighter Disability Insurance Eligibility in the Netherlands

Disability insurance – the insurance against the loss of the ability to work – is a substantial part of social security expenditures and an important part of the welfare state regime in all developed countries (Aarts et al. 1996). Like almost all elements of modern social security systems, disability insurance faces a trade-off. On the one hand, disability insurance protects unhealthy people who are not able to work from falling into poverty before they are eligible for normal retirement benefits. On the other hand, however, disability insurance creates incentives to exit the labour force early and may act as another pathway to early retirement without the incidence of a major health loss.

Both in theory and practice, great attention is paid to the analysis of the pension expenditures level, their determinants, as well as the options for their reduction, whereas the analysis of the revenues level and contributions, as the most significant revenue in contribution-based pension systems, is often neglected. The aim of this paper is to analyse the determinants of the level of contributions for pension and disability insurance in order to identify options for increasing their levels in the pension system of the Republic of Serbia. By using the comparative method, a comparative analysis of data about the trends of the most significant determinants of contribution levels among the European Union Member States and Serbia is performed. Research results have shown that increase in the contribution level for pension and disability insurance in the Republic of Serbia can be achieved by extending the definition of contribution base of employees, increasing the average effective retirement age and increasing the effective population coverage by this insurance. In addition to pointing out the options for increasing the contribution level for pension and disability insurance, the authors also propose the measures which can be applied in order to affect the increase of the contribution level for this insurance and, therefore, the total revenues level of the pension system of the Republic of Serbia.

Social Security and Retirement Around the World: Historical Trends in Mortality and Health, Employment, and Disability Insurance Participation and Reforms

The employment effects of terminating disability benefits

In the Netherlands, firms may opt out from public to private disability insurance (DI). Opponents of this “mixed market” for insurance argue that it may trigger a segmentation between firms with high risks with public insurance and low disability risks with private insurance. This article tests the importance of such risk segmentation, using administrative information on DI benefits and opting-out decisions of a panel of about 250,000 Dutch firms between 2007 and 2011. We find strong selection into private insurance of firms with low recent DI inflow rates and low current sickness rates. Accordingly, private insurers succeeded in attracting firms with low anticipated DI benefit costs in the first years to come. Our results also suggest that these effects are transitory – that is, firms that opted out have DI risks that are not structurally lower.

The Affordable Care Act in an Economy with Federal Disability Insurance

This paper uses a life cycle model to study the welfare implications of reforms to U.S. Disability Insurance (DI) while accounting for household self-insurance. In addition to crowding out the insurance value of DI, household self-insurance may drive negative selection into DI by reducing implicit application costs. Allowing for such interactions, I fnd that revenue-neutral expansionary DI reforms do not necessarily improve welfare. However, an asset test reduces negative selection and improves the welfare efects of DI expansions. Household self-insurance crowds out the value of DI expansions, but abstracting away from insurance value can still deliver erroneous policy recommendations.