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- Title
How Financial Incentives Induce Disability Insurance Recipients to Return to Work.
- Authors
Kostøl, Andreas Ravndal; Mogstad, Magne
- Abstract
Using a local randomized experiment that arises from a sharp discontinuity in Disability Insurance (DI) policy in Norway, we provide transparent and credible identification of how financial incentives induce DI recipients to return to work. We find that many DI recipients have considerable capacity to work that can be effectively induced by providing financial work incentives. We further show that providing work incentives to DI recipients may both increase their disposable income and reduce program costs. Our findings also suggest that targeted policies may be the most effective in encouraging DI recipients to return to work. (JEL D14, H55, J14, J22, J28)
- Subjects
DISABILITY insurance; RETURN to work programs; INCENTIVE (Psychology); INCENTIVE awards; EMPLOYEES; LABOR supply; NORWEGIAN politics &; government, 1945-; UNITED States politics &; government; ECONOMICS; GOVERNMENT policy
- Publication
American Economic Review, 2014, Vol 104, Issue 2, p624
- ISSN
0002-8282
- Publication type
Article
- DOI
10.1257/aer.104.2.624