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on Insurance Economics |
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Issue of 2021‒02‒01
27 papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Tulio Cravo (African Development Bank); Christopher J. O'Leary (W.E. Upjohn Institute for Employment Research); Ana Cristina Sierra (Inter-American Bank); Leandro Justino Veloso (Inter-American Bank) |
| Abstract: | This paper is based on the first use of program administrative data from Brazil’s unemployment insurance (UI) program to assess the impact of changes in UI eligibility criteria on layoff probabilities. We exploit exogenous program changes introduced by executive and legislative changes in 2015 to estimate impacts while accounting for the number of prior UI benefit requests. We estimate that changes in UI eligibility criteria had heterogeneous impacts distinguished by the number of prior benefit requests. We show that the 2015 changes in UI eligibility rules reduced layoffs and find evidence that the changes reduced collusion between workers and employers for layoffs because it became harder to extract subsidies from the UI system. The layoff reductions were greatest before workers' second benefit request. |
| Keywords: | unemployment insurance, labor supply, labor legislation, worker turnover |
| JEL: | J21 J22 J46 J65 J68 K31 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:20-318&r=all |
| By: | Lei Fang; Jun Nie; Zoe Xie |
| Abstract: | The CARES Act implemented in response to the COVID-19 crisis dramatically increases the generosity of unemployment insurance (UI) benefits, triggering concerns about its substantial impact on unemployment. This paper combines a labor market search-matching model with the SIR-type infection dynamics to study the effects of CARES UI on both unemployment and infection. More generous UI policies create work disincentives and lead to higher unemployment, but they also reduce infection and save lives. Shutdown policies and infection risk further amplify these effects of UI policies. Quantitatively, the CARES UI policies raise average unemployment by 3.8 percentage points out of a total expected increase of 11 percentage points over April to December 2020 but also reduce cumulative deaths by 4.9 percent. Eligibility expansion and the extra $600 increase in benefit levels are both important for the effects. |
| Keywords: | COVID-19; CARES Act; unemployment insurance; search and matching |
| JEL: | J64 J65 E24 |
| Date: | 2020–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:89445&r=all |
| By: | Lei Fang; Jun Nie; Zoe Xie |
| Abstract: | The outbreak of COVID-19 led to widespread shutdowns in March and April 2020 and an historically unprecedented increase in the generosity of unemployment insurance (UI) through the CARES Act. This article summarizes the key policy-relevant results from Fang, Nie, and Xie (2020), whose research examines the interactions of virus infection risk, shutdown policy, and increased UI generosity. |
| Keywords: | COVID-19; CARES Act; unemployment insurance |
| JEL: | J64 J65 E24 |
| Date: | 2020–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:fip:a00001:89441&r=all |
| By: | Zarek C. Brot-Goldberg; Timothy Layton; Boris Vabson; Adelina Yanyue Wang |
| Abstract: | We leverage two unique natural experiments to show that, in public drug insurance for the low-income elderly in the U.S., defaults have large and persistent effects on plan enrollment and beneficiary drug utilization. We estimate that when a beneficiary's default is exogenously changed from one year to the next, 96% of beneficiaries follow that default. We then develop a general framework for choice under costly cognition that allows for the possibility that either paternalistic defaults that steer consumers to plans that suit them (Thaler and Sunstein 2008) or `shocking' defaults that trigger consumers to make active choices (Carroll et al. 2009) could be optimal. We show that optimal default design depends on a previously-overlooked parameter: The elasticity of active choice propensity with respect to the value of the default. Leveraging variation in the match value of randomly-assigned default plans, we estimate an elasticity close to zero: There is little difference in the probability of active choice between beneficiaries assigned a well-matched default versus beneficiaries assigned a poorly-matched default. We also show that this passivity has real consequences, with beneficiaries assigned poorly-matched defaults experiencing large declines in drug consumption relative to those assigned well-matched defaults. This suggests that any potential welfare gains from an active choice response induced by a poorly-matched default are likely to be small and outweighed by the welfare losses due to reductions in drug consumption among beneficiaries who follow the poorly-matched default. Using a third natural experiment and a structural model of attention, we find that the little active choice that is present in this market appears to be largely random, with two-thirds of the variation in active choice coming from within-beneficiary transitory shocks to attention. Our results show that default rules are an integral part of insurance market design and that beneficiaries are likely to benefit from paternalistic defaults rather than be hurt by them. |
| JEL: | D03 D9 G52 H0 I13 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28331&r=all |
| By: | Kumar, Anjani; Saroj, Sunil; Mishra, Ashok K. |
| Abstract: | The paper explores the spread of crop insurance in India and analyzes the factors affecting the demand for crop insurance. The study also assesses the impact of crop insurance on the rice yields of smallholder rice producers. Using data from a large farm-level survey from eastern India, the study tests for robustness of the findings after controlling for other covariates and endogeneity, using propensity score matching, coarsened exact matching, and endogenous switching regression models. Results indicate a positive and significant impact of crop insurance on rice yields. |
| Keywords: | INDIA; SOUTH ASIA; ASIA; crops; farmers; crop insurance; insurance; farm size; rice; food security; treatment effects; rice yield |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1996&r=all |
| By: | Christopher J. O'Leary (W.E. Upjohn Institute for Employment Research); Stephen A. Wandner (W.E. Upjohn Institute and Urban Institute) |
| Abstract: | We present a graphic case for unemployment insurance (UI) program reform. Through a series of illustrations summarizing historical trends, we show how the UI system has diverged from its intended purposes. Our figures show the decline of the program in addressing its essential aims of paying adequate unemployment compensation during involuntary unemployment and providing reemployment services. We illustrate the big differences in UI programs that have emerged because of the broad discretion afforded states to determine benefit generosity. We also illustrate declines in the financial means for providing benefits and reemployment services and a widening divergence among states in the quality of UI programs. Our concluding section presents a list of reforms that would restore UI as a pillar of social insurance and the labor market. |
| Keywords: | unemployment insurance, benefit eligibility, benefit adequacy, wage replacement ratio, recipiency rate, forward funding, taxable wage base, experience rating, reemployment services, program administration |
| JEL: | J65 H71 J68 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:19-317&r=all |
| By: | Martin Hodula; Jan Janku; Martin Casta; Adam Kucera |
| Abstract: | This paper tests potential determinants of the development of the insurance sector. Using a rich dataset for 24 European countries spanning two decades, we identify a set of macro-financial factors that are the most robust predictors of growth of gross premiums in the life and non-life insurance sectors. We show that both life and non-life premiums co-move with the business cycle and are positively related to higher savings and a more developed financial system. In addition, we provide new evidence on the role of market concentration and price effects. We find that market concentration matters only for life insurance, whereas the price channel is significant only for non-life insurance. From a policy perspective, our empirical estimates can be used to refine the existing macroprudential stress tests of the insurance sector. |
| Keywords: | Business cycle, insurance, life insurance, macro-financial determinants, non-life insurance |
| JEL: | D4 E32 G22 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:cnb:wpaper:2020/8&r=all |
| By: | Guido Matias Cortes (York University); Eliza C. Forsythe (University of Illinois, Urbana-Champaign) |
| Abstract: | Using data from the Current Population Survey (CPS), we show that the Covid-19 pandemic led to a loss of aggregate real labor earnings of more than $250 billion between March and July 2020. By exploiting the panel structure of the CPS, we show that the decline in aggregate earnings was entirely driven by declines in employment; individuals who remained employed did not experience any atypical earnings changes. We find that job losses were substantially larger among workers in low-paying jobs. This led to a dramatic increase in inequality in labor earnings during the pandemic. Simulating standard unemployment benefits and Unemployment Insurance (UI) provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, we estimate that UI payments exceeded total pandemic earnings losses between March and July 2020 by $9 billion. Workers who were previously in the bottom third of the earnings distribution received 49% of the pandemic-associated UI and CARES benefits, reversing the increases in labor earnings inequality. These lower-income individuals are likely to have a high fiscal multiplier, suggesting these extra payments may have helped stimulate aggregate demand. |
| Keywords: | Covid-19, employment, earnings replacement, unemployment insurance CARES Act, distributional impacts |
| JEL: | H31 I38 J31 J38 J65 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:20-332&r=all |
| By: | Christopher J. O'Leary (W.E. Upjohn Institute for Employment Research); Kenneth J. Kline (W.E. Upjohn Institute for Employment Research) |
| Abstract: | Regular unemployment insurance (UI) benefits are paid from reserves held in state accounts at the U.S. Treasury. The Great Recession exhausted the majority of UI reserve accounts, and not all states have rebuilt reserves. We examine the adequacy of current state and systemwide UI reserves to weather a mild, moderate, or severe recession in the coming months. Our results suggest that a recession as severe as the average of those occurring since 1975 would cause 18 states to exhaust UI reserves. Our simulations account for the fact that several states have cut benefit generosity since the Great Recession ended. Results suggest that despite federal incentives for forward funding, reserves are insufficient in many states. By accepted standards, state benefit provisions are not excessive, but state-imposed constraints on financing make the system slow to recover from debt. We suggest modest actions for UI financing reform. |
| Keywords: | Unemployment insurance, benefit financing, forward funding, taxable wage base, reserve ratio, adequate reserves, average high-cost rate, federal loans, state revenue bonds |
| JEL: | H71 H81 J65 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:20-321&r=all |
| By: | Kara Contreary; Katharine Bradley; Matthew Niedzwiecki; Kristin Maurer; Sandra Chao; Brenda Natzke; Maggie Samra |
| Abstract: | This report presents findings from an evaluation of section 1115 demonstrations in six states—Arkansas, Indiana, Iowa, Michigan, Montana, and New Hampshire—that tested new approaches to administering Medicaid for low-income adults during the period 2014 - 2017. |
| Keywords: | Medicaid, section 1115 demonstration, premiums, behavior incentives, premium assistance |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:042b5fe43da44afea9538552b1c0f4dd&r=all |
| By: | International Monetary Fund |
| Abstract: | This Technical Note on Insurance Sector Regulation and Supervision provides an update and an assessment of the development of regulation and supervision of the Polish insurance sector since an assessment concluded in 2012. The note focuses on key issues, with reference to international standards but without presenting a detailed assessment of Poland’s observance. The supervision of intermediaries has also been strengthened in line with a 2012 Financial Sector Assessment Program recommendation. The Solvency II changes appear well-embedded, without significant exemptions or transitional arrangements. With limited long-term guarantee business, life insurers have currently no need for the special measures adopted for such business in many EU countries. However, the recent emergence of the first Polish financial conglomerate, which is headed by an insurer, poses supervisory challenges. In respect to the selected other areas of the insurance framework that were reviewed, the findings highlighted strengths in the approach, with some scope for further development. |
| Keywords: | Insurance companies;Insurance;Solvency;Financial Sector Assessment Program;Insurance supervision;ISCR,CR,risk assessment,line of business,PFSA supervision,PFSA supervisor,supervisory work |
| Date: | 2019–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:2019/121&r=all |
| By: | Venugopal Mothkoor; Nina Badgaiyan |
| Abstract: | We measure multidimensional poverty in India using National Sample Survey Organization data from 2014-15 to 2017-18. We use income, health, education, and standard of living to measure the multidimensional poverty index (MPI). The MPI headcount declined from 26.9 to 13.75 per cent over the study period. The all-India estimates indicate that 144 million people were lifted from poverty during this period. We include different health dimensions, factoring in insurance, institutional coverage, antenatal care, and chronic conditions. |
| Keywords: | multidimensional poverty index, Income, Poverty, India, Deprivation, rural, Urban, COVID-19 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2021-1&r=all |
| By: | World Bank |
| Keywords: | Health, Nutrition and Population - Health Insurance Poverty Reduction - Employment and Shared Growth Social Protections and Labor - Pensions & Retirement Systems Social Protections and Labor - Social Protections & Assistance |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:33918&r=all |
| By: | World Bank Group |
| Keywords: | Finance and Financial Sector Development - Finance and Development Finance and Financial Sector Development - Financial Regulation & Supervision Finance and Financial Sector Development - Insurance & Risk Mitigation |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:33177&r=all |
| By: | Anna Denkowska; Stanis{\l}aw Wanat |
| Abstract: | The enlargement of the European Union to new countries in 2004 launched mechanisms supporting the development of various social and economic areas, as well as levelling the differences between the Community members in these areas. This article focuses on the insurance sector. Its main purpose is to analyze the development and similarity of the insurance markets of old and new members of the European Union after the enlargement in 2004. |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2012.15078&r=all |
| By: | Gandhi, Amit (University of Pennsylvania & Microsoft); Samek, Anya (University of California, San Diego); Serrano-Padia, Ricardo (School of Economics) |
| Abstract: | Technological advances in the insurance industry mean that insurers may be better informed about underlying risks than consumers. We evaluate the impact of these information frictions by combining demand elicitation surveys with insurance claim data. We find an ‘information premium’ - i.e., consumers are willing to pay more for insurance when risks are uncertain. Importantly, we find that the information premium is negatively correlated with risk aversion. This leads to a selection effect: individuals who purchase insurance are not necessarily the most risk averse. The resulting misallocation of insurance can lead to large welfare losses and biased risk preference estimates. |
| Keywords: | risk; uncertainty; ambiguity; insurance; compound risk; demand analysis; information disclosure; incentivized survey; laboratory experiment; frictions |
| JEL: | D12 D14 D81 G22 J33 |
| Date: | 2021–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:ris:drxlwp:2021_003&r=all |
| By: | Musgrave, Ralph S. |
| Abstract: | Deposit insurance is beneficial in that it ensures everyone has a safe method of storing and transferring money. That is a basic human right. Unfortunately deposit insurance also supports a commercial activity, namely depositing money at a bank with a view to the bank earning interest for the depositor, which a bank can only do by in effect lending out depositors’ money. That is just as commercial as depositing money with a stockbroker, mutual fund or unit trust with a view to interest or some other form of return being earned. And it is not the job of government to support commercial activities. As for the idea that banks create the money they lend out, rather than intermediate, that is dealt with in the opening paragraphs below. Preventing deposit insurance assisting the above commercial activity while retaining a form of totally safe deposits is easily done by splitting deposits into two types: first, those where the depositor simply wants money stored safely, with that money being lodged at the central bank where it earns no interest, and second, those where the depositor wants to be into commerce. Interest is earned on the latter deposits, but depositors carry the risk involved which essentially turns those deposits into equity. And that is precisely what full reserve banking consists of. |
| Keywords: | deposit insurance; full reserve; narrow banking; 100% reserves |
| JEL: | E5 E58 G2 |
| Date: | 2021–01–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:105157&r=all |
| By: | Tzougas, George; Jeong, Himchan |
| Abstract: | This article presents the Exponential–Generalized Inverse Gaussian regression model with varying dispersion and shape. The EGIG is a general distribution family which, under the adopted modelling framework, can provide the appropriate level of flexibility to fit moderate costs with high frequencies and heavy-tailed claim sizes, as they both represent significant proportions of the total loss in non-life insurance. The model’s implementation is illustrated by a real data application which involves fitting claim size data from a European motor insurer. The maximum likelihood estimation of the model parameters is achieved through a novel Expectation Maximization (EM)-type algorithm that is computationally tractable and is demonstrated to perform satisfactorily. |
| Keywords: | Exponential–Generalized Inverse Gaussian Distribution; EM Algorithm; regression models for the mean; dispersion and shape parameters; non-life insurance; heavy-tailed losses |
| JEL: | C1 |
| Date: | 2021–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:108210&r=all |
| By: | Deborah Peikes; Kaylyn Swankoski; Ann O’Malley; Lori Timmins; Dana Petersen; Kristin Geonnotti; Ha Tu; Pragya Singh; Arkadipta Ghosh; Stacy Dale; Rosalind Keith; Dana Jean-Baptiste; Sheila Hoag; Katie Morrison Lee; Rumin Sarwar; Victoria Peebles; Min-Young Kim; Ning Fu; Eunhae Shin; Sean Orzol; Jessica Laird; Nikkilyn Hensleigh; Genna Cohen; Asta Sorensen; Kristie Liao; Melanie Au; Rachel Machta; Janice Genevro; Arnold Chen; Mynti Hossain; Sara Pittman; Shannon Heitkamp; Randall Brown |
| Abstract: | The Third Annual Report presents findings from the independent evaluation of the first three years of CPC+ for practices that began the model in 2017. The report examines CPC+ participation, supports, implementation, and impacts. |
| Keywords: | Comprehensive Primary Care Plus, advanced primary care, patient-centered medical home model, Medicare fee-for-service, multi-payer, payment reform |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:407dc5d96c61409d898002cd569395f1&r=all |
| By: | Gopi Shah Goda; Jialu Liu Streeter |
| Abstract: | Wealth varies considerably across the population and changes significantly over the lifecycle. In this paper, we trace out trajectories of wealth across several key life milestones, including marriage, homeownership, childbirth, divorce, disability, health shocks, retirement and widowhood using multiple decades of longitudinal panel data. We estimate both changes over the ten-year period before and after each milestone and assess whether those changes occur gradually or sharply after the milestone. We find evidence of significant long-run increases in wealth associated with homeownership and retirement, and significant long-run reductions in wealth associated with divorce, health shocks, and disability. In general, these changes appear to occur gradually rather than immediately after the milestone. Our results also indicate a large degree of heterogeneity across demographics, socioeconomic status and risk protection from insurance. In particular, those with lower levels of socioeconomic status and those without access to risk protection experience smaller wealth gains (or larger wealth losses) following life-course transitions. These results identify populations and life stages where individuals are most vulnerable to large reductions in wealth. |
| JEL: | G51 I13 J1 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28329&r=all |
| By: | Chakraborty, Tanika; Pandey, Manish |
| Abstract: | We use panel data for rural Kyrgyzstan to examine households' international migration response when faced with shocks. Using a household fixed effects regression model, we find that while a drought shock increases the likelihood of migration, winter and earthquake shocks reduce the likelihood of migration. We use a simple theoretical framework to illustrate the trade-off between two effects of a shock for a household: loss of income and increase in the need of labor services. We show that migration increases when the former effect of a shock dominates, it reduces when the latter effect dominates. We explore these mechanisms by examining how the migration-response to shocks changes in the presence of alternate coping mechanisms and by evaluating the effect of shocks on a household's decision to send and recall a migrant member. We find that when households have easier access to informal finance the migration-response is muted only for shocks for which the adverse income effect dominates. Our findings also suggest that while shocks for which the loss of income effect dominates have a greater effect on the decision to send a migrant, shocks for which the need of labor services effect dominates only affect the decision to recall a migrant. These findings provide evidence in favor of the proposed mechanisms through which shocks affect temporary migration. |
| Keywords: | Temporary migration,shocks,insurance,informal finance,Asia,Kyrgyzstan |
| JEL: | J61 O15 O16 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:759&r=all |
| By: | Costas Meghir (Cowles Foundation, Yale University, NBER, IZA, CEPR, and Institute for Fiscal Studies); Ahmed Mushfiq Mobarak (Cowles Foundation, Yale University); Ahmed Corina Mommaerts (University of Wisconsin – Madison); Ahmed Melanie Morten (Stanford University and NBER) |
| Abstract: | We document that an experimental intervention o?ering transport subsidies for poor rural households to migrate seasonally in Bangladesh improved risk sharing. A theoretical model of endogenous migration and risk sharing shows that the e?ect of subsidizing migration depends on the underlying economic environment. If migration is risky, a temporary subsidy can induce an improvement in risk sharing and enable pro?table migration. We estimate the model and ?nd that the migration experiment increased welfare by 12.9%. Counterfactual analysis suggests that a permanent, rather than temporary, decline in migration costs in the same environment would result in a reduction in risk sharing. |
| Keywords: | Informal Insurance, Migration, Bangladesh, RCT |
| JEL: | D12 D91 D52 O12 R23 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2185r3&r=all |
| By: | World Bank |
| Keywords: | Agriculture - Agricultural Sector Economics Finance and Financial Sector Development - Access to Finance Finance and Financial Sector Development - Insurance & Risk Mitigation Finance and Financial Sector Development - Payment Systems & Infrastructure Rural Development - Rural Microfinance and SMEs |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:33400&r=all |
| By: | David R. Ba\~nos |
| Abstract: | The main purpose of this work is to derive a partial differential equation for the reserves of life insurance liabilities subject to stochastic interest rates where the benefits and premiums depend directly on changes in the interest rate curve. In particular, we allow the payment streams to depend on the performance of an overnight technical interest rate, making them stochastic as well. This opens up for considering new types of contracts based on the performance of the insurer's returns on their own investments. We provide explicit solutions for the reserves when the premiums and benefits vary according to interest rate levels or averages under the Vasicek model and conduct some simulations computing reserve surfaces numerically. We also give an example of a reinsurance treaty taking over pension payments when the insurer's average returns fall under some specified threshold. |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2012.15541&r=all |
| By: | Deborah Peikes; Kaylyn Swankoski; Ann O’Malley; Lori Timmins; Dana Petersen; Kristin Geonnotti; Ha Tu; Pragya Singh; Arkadipta Ghosh; Stacy Dale; Rosalind Keith; Dana Jean-Baptiste; Sheila Hoag; Katie Morrison Lee; Rumin Sarwar; Victoria Peebles; Min-Young Kim; Ning Fu; Eunhae Shin; Sean Orzol; Jessica Laird; Nikkilyn Hensleigh; Genna Cohen; Asta Sorensen; Kristie Liao; Melanie Au; Rachel Machta; Janice Genevro; Arnold Chen; Mynti Hossain; Sara Pittman; Shannon Heitkamp; Randall Brown |
| Abstract: | The Findings at a Glance provides a brief overview of key findings from the independent evaluation of the first three years of CPC+, for practices that began the model in 2017. |
| Keywords: | Comprehensive Primary Care Plus, advanced primary care, patient-centered medical home model, Medicare fee-for-service, multi-payer, payment reform |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:bfc6d2207dcf4bf2a11e960836cb2699&r=all |
| By: | John Coglianese (Federal Reserve Board of Governors); Brendan M. Price (Federal Reserve Board of Governors) |
| Abstract: | Joblessness is highly seasonal. To analyze how households adapt to seasonal joblessness, we introduce a measure of seasonal work interruptions premised on the idea that a seasonal worker will tend to exit employment around the same time each year. We show that an excess share of prime-age U.S. workers experience recurrent separations spaced exactly 12 months apart. These separations coincide with aggregate seasonal downturns and are concentrated in seasonally volatile industries. Examining workers most prone to seasonal work interruptions, we find that these workers incur large earnings losses during the off-season. Lost earnings are 1) driven mainly by repeated separations from the same employer, 2) not recouped at other firms, 3) partly offset by unemployment benefits, and 4) amplified by concurrent drops in partners’ earnings. On net, household income falls by about $0.80 for each $1 lost in own earnings. |
| Keywords: | seasonality, seasonal employment, job loss, household income, household labor dynamics, unemployment, unemployment insurance |
| JEL: | D10 E32 J63 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:20-337&r=all |
| By: | Patrick Button (Tulane University, NBER, and IZA); Mashfiqur R. Kahn (Bates White Consulting) |
| Abstract: | The United States Social Security Amendments of 1983 (SSA1983) increased the full retirement age (FRA) and increased penalties for retiring before the FRA. This cut to retirement benefits caused spillover effects on Social Security Disability Insurance (SSDI) applications and receipt by making SSDI relatively more generous. We explore if stronger disability and age discrimination laws moderated these spillovers, using variation whereby many state laws are broader or stronger than federal law. We estimate the effects of these laws on SSDI applications and receipt using a difference-in-differences approach, comparing cohorts affected by SSA1983 to similarly aged unaffected cohorts, across states. We find that a broader definition of disability, where only a medically diagnosed condition is required to be covered under state law, significantly reduces SSDI applications induced by SSA1983, but has no effect on SSDI receipt, likely because the foregone applications were for those with less severe conditions that were unlikely to have been approved for SSDI. We find some evidence that other broader or stronger features of state disability discrimination laws reduce both SSDI applications and receipt. We do not find much evidence that age discrimination laws reduce spillovers to SSDI. These results suggest that broader and stronger disability discrimination laws reduce employment barriers, allowing older individuals to work longer, possibly reducing reliance on SSDI and costly applications to SSDI. |
| Keywords: | Disability, aging, discrimination, employment law; disability insurance; Social Security, Americans with Disability Act, Age Discrimination in Employment Act, Social Security Amendments of 1983 |
| JEL: | H55 J71 J78 K31 J14 J26 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:20-326&r=all |