Economic aspects of optimal disability benefits

Peter Diamond*, Eytan Sheshinski

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

66 Scopus citations

Abstract

This paper analyzes optimal disability and retirement (or welfare) benefits with imperfect disability evaluation (with some able workers judged disabled and some disabled workers judged able). Thus the levels of both disability and retirement benefits affect labor supply. With anyone not working eligible for retirement benefits, we analyze the optimal structure of benefits for a given disability screening mechanism and briefly consider the problem of optimal evaluations of disability evidence. In the United States, there is an overlap in eligibility for disability and retirement portions of Social Security. More generally, welfare is sometimes available to people denied disability benefits.

Original languageEnglish
Pages (from-to)1-23
Number of pages23
JournalJournal of Public Economics
Volume57
Issue number1
DOIs
StatePublished - May 1995

Keywords

  • Disability
  • Retirement
  • Social security

Fingerprint

Dive into the research topics of 'Economic aspects of optimal disability benefits'. Together they form a unique fingerprint.

Cite this