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- W2116777985 abstract "This paper solves and calibrates a life-cycle model that characterizes in detail the Social Security rules of the Social Security Disability Insurance (DI) and Old Age programs. The model is then used to predict the behavioral response to a partial Disability Benefit system that allows individuals to combine relatively high levels of earnings with lower disability benefits. The appeal of this policy hinges on the possibility of inducing applicants to self-select themselves into a given disability level, while maintaining those with some work capacity in the labor force, and therefore keep them contributing through their labor taxes to the Social Security system, easing the budgetary pressures of the overall Social Security system. The current dichotomous definition of disability can result in relatively productive individuals dropping from the labor force to receive benefits in order to have access to a total income high enough to make ends meet. Instead, the new system will establish a culture of continuous attachment to the labor force in the wake of health limitations. The simulation results show that there will be significant increases in both DI applications and DI rolls under the partial DI system; however, most of the increases are due to increases in applications for partial benefits and awards to partial benefits. In fact, full DI benefits applications and full DI benefit rolls will drop substantially. The mean duration spent on DI program will decrease dramatically. Our budgetary and welfare calculations show that a partial DI system, under some conditions, could result in financial savings for the program as well as individuals’ welfare improvements." @default.
- W2116777985 created "2016-06-24" @default.
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- W2116777985 date "2008-01-01" @default.
- W2116777985 modified "2023-09-27" @default.
- W2116777985 title "Partial Benefits in the Social Security Disability Insurance Program: A Policy Alternative to Foster Work among the Disabled †" @default.
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