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Introduction A large expansion in the number of individuals collecting disability insurance benefits has been observed in many industrialized countries. This growth, especially in the United States, has led some researchers to examine the causes of these increases. Most of this research has focused on the disincentive effects of disability benefits on labor supply. (1) By comparison, relatively little research has examined other features of disability policy such as the criteria used to determine the eligibility for benefits, which can be summarized in the denial rates for applicants. Changes in these criteria can also affect an individual's application behavior and labor supply decisions. For example, Gruber and Kubik (1997) examined the effect of rejection rates from the US Disability Insurance (DI) program on the labor force participation of older men and found that a 10 percent rise in denial rates was associated with a statistically significant 2.8 percent decline in labor force nonparticipation, among men aged 45-64. More recently, Campolieti (2003) examined the effect of the 1989 changes in the Canada Pension Plan disability program's eligibility criteria, which made the screening of applications less stringent, on the labor force participation of older men. Using a difference-in-difference estimator, with standard errors that properly accounted for the clustering in the data, and data from 1987 to 1991, Campolieti found that these changes in eligibility criteria were associated with a 1.5 percentage point increase in nonparticipation. (2)

GENRE
Business & Personal Finance
RELEASED
2007
March 1
LANGUAGE
EN
English
LENGTH
34
Pages
PUBLISHER
Atlantic Economic Society
SELLER
The Gale Group, Inc., a Delaware corporation and an affiliate of Cengage Learning, Inc.
SIZE
305.5
KB

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