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Partial Benefits in the Social Security Disability Insurance Program
Author(s) -
Yin Na
Publication year - 2015
Publication title -
journal of risk and insurance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.055
H-Index - 63
eISSN - 1539-6975
pISSN - 0022-4367
DOI - 10.1111/jori.12028
Subject(s) - disability insurance , social security , earnings , disability benefits , welfare , actuarial science , work (physics) , social insurance , business , economics , public economics , finance , mechanical engineering , engineering , market economy
The current U.S. Social Security Disability Insurance program is an all‐or‐nothing system that has been criticized for creating strong work disincentives. In an empirically grounded and calibrated life‐cycle model, I simulate behavioral responses to a partial disability benefit system, a policy alternative to the current program, which allows individuals to claim partial disability and combine earnings with disability benefits. Simulation results show financial savings for the program as well as welfare improvements for individuals with disabilities.