How do unemployment insurance benefits affect the decision to apply for social security disability insurance?

Research output: Contribution to journalArticlepeer-review

8 Scopus citations

Abstract

This paper examines whether Unemployment Insurance (UI) benefits affect the decision to apply for Social Security Disability Insurance (DI). Using data from the Survey of Income and Benefits matched to administrative records on DI applications, I find that higher UI benefits reduce applications for DI. This substitution effect is imprecisely estimated but economically significant, implying that a $1.00 increase in UI benefits reduces DI expenditures by 15 cents. Recognizing this cost-saving effect would increase the optimal UI benefit level by more than 20 percent for coefficients of relative risk aversion ranging from two to five.

Original languageEnglish (US)
Pages (from-to)62-94
Number of pages33
JournalJournal of Human Resources
Volume51
Issue number1
DOIs
StatePublished - 2016

ASJC Scopus subject areas

  • Economics and Econometrics
  • Strategy and Management
  • Organizational Behavior and Human Resource Management
  • Management of Technology and Innovation

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