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• W2943359117 abstract "We study the aggregate consequences of the Social Security Disability Insurance (DI) program, focusing on the role of complementarity between heterogeneous human capital. First, we develop and estimate a wage process in which individuals' human capital comprises (pure) labor and experience, and their efficiencies are affected by disability. We find that older workers are more experience-abundant, and that disability causes a smaller loss in the efficiency of experience than it does in the efficiency of labor. Further, the estimated aggregate production technology shows that labor and experience are complementary inputs. Combining these empirical results with a structural general equilibrium model, we analyze the labor market implications of removing the DI program. Removal of the DI program induces an increase in the relative supply of experience, thus affecting the marginal productivities of inputs and wages of all workers in the economy. Despite the increased labor market entry of disabled workers, the aggregate productivity may increase in the counterfactual economy, thanks to the complementarity between labor and experience." @default.
• W2943359117 created "2019-05-09" @default.
• W2943359117 creator A5006602557 @default.
• W2943359117 creator A5059095627 @default.
• W2943359117 date "2018-01-01" @default.
• W2943359117 modified "2023-09-27" @default.
• W2943359117 title "Understanding the Aggregate Effects of Disability Insurance" @default.
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• W2943359117 doi "https://doi.org/10.2139/ssrn.3236889" @default.
• W2943359117 hasPublicationYear "2018" @default.
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