_________________________________________________________________
E M P L O Y E E B E N E F I T S , C O M P E N S A T I O N
& P E N S I O N L A W
Vol. 3, No. 19: October 10, 2002
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Publisher: LSN Employment, Labor, Compensation & Pension Journals
a division of
Social Science Electronic Publishing, Inc. (SSEP)
and Social Science Research Network (SSRN)
Editor: PAMELA PERUN
Urban Institute
Mailto:pamela@planetnow.com
Copyright: SSEP, Inc. 2002. All rights reserved.
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Topic of This Issue:
Disability Benefits
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T A B L E of C O N T E N T S
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NEW and FORTHCOMING ARTICLES
"Disability Income: Voluntary Employment-Based Plans"
EBRI Notes, Vol. 23, No. 6, June 2002
KENNETH J. MCDONNELL
Employee Benefit Research Institute (EBRI)
"Disability, the Supreme Court, and Equal Protection: Standing at
the Crossroads of Progressive and Retrogressive Logic in
Constitutional Classification"
University of Michigan Journal of Law Reform, Forthcoming
ANITA SILVERS
University of San Francisco
Department of Philosophy
MICHAEL STEIN
College of William and Mary
School of Law
"The Rise in the Disability Rolls and the Decline in
Unemployment"
Quarterly Journal of Economics, February 2003
DAVID AUTOR
Massachusetts Institute of Technology (MIT)
Department of Economics
National Bureau of Economic Research (NBER)
MARK G. DUGGAN
University of Chicago
Department of Economics
WORKING PAPERS
"Incapacity Benefits and Employment Policy"
J. MICHAEL ORSZAG
Watson Wyatt Worldwide
Reigate, Surrey Office
Institute for the Study of Labor (IZA)
DENNIS J. SNOWER
University of London, Birkbeck College
Department of Economics and Finance
Institute for the Study of Labor (IZA)
Centre for Economic Policy Research (CEPR)
"Health Insurance Coverage and the Disability Insurance
Application Decision"
JONATHAN GRUBER
Massachusetts Institute of Technology (MIT)
Department of Economics
National Bureau of Economic Research (NBER)
JEFFREY D. KUBIK
Syracuse University
Department of Economics
"The Welfare Implications of Increasing Disability Insurance
Benefit Generosity"
JOHN BOUND
University of Michigan
National Bureau of Economic Research (NBER)
JULIANNE B. CULLEN
University of Michigan
Department of Economics
AUSTIN NICHOLS
University of Michigan
Department of Economics
LUCIE SCHMIDT
Williams College
Department of Economics
"Retiring Together or Working Alone: The Impact of Spousal
Employment and Disability on Retirement Decisions"
RICHARD W. JOHNSON
Urban Institute
MELISSA FAVREAULT
Urban Institute
S S R N I N F O R M A T I O N
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N E W and F O R T H C O M I N G Articles
_________________________________________________________________
"Disability Income: Voluntary Employment-Based Plans"
EBRI Notes, Vol. 23, No. 6, June 2002
BY: KENNETH J. MCDONNELL
Employee Benefit Research Institute (EBRI)
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=318961
Contact: KENNETH J. MCDONNELL
Email: Mailto:MCDONNELL@EBRI.ORG
Postal: Employee Benefit Research Institute (EBRI)
Suite 600
2121 K Street, NW
Washington, DC 20037-1896 UNITED STATES
Phone: (202) 775-6342
Fax: (202) 775-6312
Note: The PDF for the above title also contains the full text
of another June 2002 EBRI Notes article abstracted on
SSRN: "IRA and 401(k)-Type Plan Ownership."
Paper Requests:
Contact Alicia Willis at Mailto:publications@ebri.org, or 2121 K
St., NW, Suite 600, Washington, DC 20037-1896.
Phone:(202)572-7422, Fax:(202)775-6312. Full-Text downloads are
available from SSRN Online for $7.50.
ABSTRACT:
According to a recent survey, employers' direct costs for
disability coverage (defined as payments or premiums for
workers' compensation, sick pay, and short-term and long-term
disability plans) were 6.3 percent of payroll in 1999. Indirect
costs of disability (defined as costs for overtime, replacement
workers needed when an employee is out on disability, and
workstation accommodations) totaled 8 percent of payroll.
Indirect costs were growing at a faster rate than direct costs
in 1999. This article discusses types of voluntary plans that
employers are offering and the percentages of workers who are
participating in them.
Keywords: Employee benefit participation rates,
Employment-based benefits
JEL Classification: J32
______________________________
"Disability, the Supreme Court, and Equal Protection: Standing at
the Crossroads of Progressive and Retrogressive Logic in
Constitutional Classification"
University of Michigan Journal of Law Reform, Forthcoming
BY: ANITA SILVERS
University of San Francisco
Department of Philosophy
MICHAEL STEIN
College of William and Mary
School of Law
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=307721
Contact: MICHAEL STEIN
Email: Mailto:mastei@wm.edu
Postal: College of William and Mary
School of Law
South Henry Street
P.O. Box 8795
Williamsburg, VA 23187-8795 UNITED STATES
Phone: (757) 221-3762
Fax: (757) 221-3261
Co-Auth: ANITA SILVERS
Email: Mailto:asilvers@sfsu.edu
Postal: University of San Francisco
Department of Philosophy
1600 Holloway Avenue
San Francisco, CA 94132 UNITED STATES
ABSTRACT:
This Article compares current disability jurisprudence with the
development of sex equality jurisprudence in the area of
discrimination. It demonstrates that current disability law
resembles the abandoned, sexist framework for determining sex
equality and argues that disability equality cases should
receive similar analysis as the more progressive, current sex
equality standard. As such, the Article attempts to synthesize
case law (14th Amendment Equal Protection jurisprudence) and
statutory law (Title VII and the ADA) into a comprehensive
overview of the state of current disability law viewed within
the context of discrimination law in general.
______________________________
"The Rise in the Disability Rolls and the Decline in
Unemployment"
Quarterly Journal of Economics, February 2003
BY: DAVID AUTOR
Massachusetts Institute of Technology (MIT)
Department of Economics
National Bureau of Economic Research (NBER)
MARK G. DUGGAN
University of Chicago
Department of Economics
Contact: DAVID AUTOR
Email: Mailto:dautor@mit.edu
Postal: Massachusetts Institute of Technology (MIT)
Department of Economics
Room E52-371
50 Memorial Drive
Cambridge, MA 02142 UNITED STATES
Phone: 617-258-7698
Fax: 617-253-1330
Co-Auth: MARK G. DUGGAN
Email: Mailto:MDUGGAN@MIDWAY.UCHICAGO.EDU
Postal: University of Chicago
Department of Economics
1126 East 59th Street
Chicago, IL 60637 UNITED STATES
ABSTRACT:
Between 1984 and 2001, the share of non-elderly adults receiving
Social Security Disability Insurance income (DI) rose by 60
percent to 5.3 million beneficiaries. Rapid program growth
despite improving aggregate health appears explained by reduced
screening stringency, declining demand for less skilled workers,
and an unforeseen increase in the earnings replacement rate. We
estimate that the sum of these forces doubled the labor force
exit propensity of displaced high school dropouts after 1984,
lowering measured U.S. unemployment by one half a percentage
point. Steady state calculations augur a further 40 percent
increase in the rate of DI receipt.
Keywords: disability, social security, unemployment,
inequality, low skilled workers
JEL Classification: H53, H55, I12, J21, J64, J68
______________________________
W O R K I N G P A P E R Abstracts
_________________________________________________________________
"Incapacity Benefits and Employment Policy"
BY: J. MICHAEL ORSZAG
Watson Wyatt Worldwide
Reigate, Surrey Office
Institute for the Study of Labor (IZA)
DENNIS J. SNOWER
University of London, Birkbeck College
Department of Economics and Finance
Institute for the Study of Labor (IZA)
Centre for Economic Policy Research (CEPR)
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=323683
Other Electronic Document Delivery:
ftp://ftp.iza.org/dps/dp529.pdf
SSRN only offers technical support for papers
downloaded from the SSRN Electronic Paper Collection
location. When URLs wrap, you must copy and paste
them into your browser eliminating all spaces.
Paper ID: IZA Discussion Paper No. 529
Date: July 2002
Contact: DENNIS J. SNOWER
Email: Mailto:DSNOWER@ECON.BBK.AC.UK
Postal: University of London, Birkbeck College
Department of Economics and Finance
7-15 Gresse Street
London WIT 1LL, UNITED KINGDOM
Co-Auth: J. MICHAEL ORSZAG
Email: Mailto:Michael.Orszag@eu.watsonwyatt.com
Postal: Watson Wyatt Worldwide
Reigate, Surrey Office
Watson House
London Road
Reigate, Surrey RH2 9PQ, UNITED KINGDOM
Paper Requests:
Contact: Mark Fallak, Institute for the Study of Labor (IZA),
P.O. Box 7240, D-53072 Bonn, Germany. Phone:+49-228-3894-0 ext.
223. Fax:+ 49-228-3894-510. Mailto:Fallak@iza.org
ABSTRACT:
The paper explores the employment implications of allowing
people the opportunity of using a portion of their incapacity
benefits to provide employment vouchers for employers that hire
them. The analysis indicates that introducing this policy could
increase employment, raise the incomes of incapacity benefit
recipients, and reduce employers' labor costs. The analysis
explicitly derives the optimal voucher, i.e. the voucher that
maximizes employment at no extra budgetary cost. This voucher is
shown to depend on the size of incapacity benefits, the
separation rate in the absence of the voucher, and the degree of
displacement; but it does not depend on the hiring rate.
Numerical calculations show the optimal voucher to be large by
the standards of many existing employment subsidies.
Keywords: Incapacity Benefits, Employment Policy, Labor Force
Participation
JEL Classification: J23, J24, J31, J32, J64
______________________________
"Health Insurance Coverage and the Disability Insurance
Application Decision"
BY: JONATHAN GRUBER
Massachusetts Institute of Technology (MIT)
Department of Economics
National Bureau of Economic Research (NBER)
JEFFREY D. KUBIK
Syracuse University
Department of Economics
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=328698
Paper ID: NBER Working Paper No. W9148
Date: September 2002
Contact: JONATHAN GRUBER
Email: Mailto:gruberj@mit.edu
Postal: Massachusetts Institute of Technology (MIT)
Department of Economics
Room E52-355
50 Memorial Drive
Cambridge, MA 02142 UNITED STATES
Phone: 617-253-8892
Fax: 617-253-1330
Co-Auth: JEFFREY D. KUBIK
Email: Mailto:JDKUBIK@MAXWELL.SYR.EDU
Postal: Syracuse University
Department of Economics
426 Eggers Hall
Syracuse, NY 13244-1020 UNITED STATES
Paper Requests:
Full-Text downloads are available from SSRN Online for $5.
ABSTRACT:
We investigate the effect of health insurance coverage on the
decision of individuals to apply for Disability Insurance (DI).
Those who qualify for DI receive public insurance under
Medicare, but only after a two-year waiting period. This raises
concerns that many disabled are going uninsured while they wait
for their Medicare coverage. Moreover, the combination of this
waiting period and the uncertainty about application acceptance
may deter those with health insurance on their jobs, but no
alternative source of coverage, from leaving work to apply for
DI. Data from the Health and Retirement Survey show that, in
fact, uninsurance does not rise during the waiting period for DI
benefits; reductions in own employer coverage are small, and are
offset by increases in other sources of insurance.
Correspondingly, we find that imperfect insurance coverage does
deter DI application. Those who have an alternative source of
insurance coverage (coverage from a spouse's employer or retiree
coverage), are 26 to 74% more likely to apply for DI than those
without such an alternative. Thus, limiting this waiting period
would not increase the insurance coverage of the disabled in the
U.S., but it would significantly increase applications to the DI
program.
JEL Classification: H3, I1
______________________________
"The Welfare Implications of Increasing Disability Insurance
Benefit Generosity"
BY: JOHN BOUND
University of Michigan
National Bureau of Economic Research (NBER)
JULIANNE B. CULLEN
University of Michigan
Department of Economics
AUSTIN NICHOLS
University of Michigan
Department of Economics
LUCIE SCHMIDT
Williams College
Department of Economics
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=330988
Paper ID: NBER Working Paper No. W9155
Date: September 2002
Contact: JOHN BOUND
Email: Mailto:jbound@umich.edu
Postal: University of Michigan
611 Tappan Street
Ann Arbor, MI 48109-1220 UNITED STATES
Phone: 313-998-7149
Fax: 313-998-7415
Co-Auth: JULIANNE B. CULLEN
Email: Mailto:JBCULLEN@UMICH.EDU
Postal: University of Michigan
Department of Economics
314 Lorch Hall
611 Tappan Street
Ann Arbor, MI 48109-1220 UNITED STATES
Co-Auth: AUSTIN NICHOLS
Email: Mailto:nicholsa@umich.edu
Postal: University of Michigan
Department of Economics
611 Tappan Street
Ann Arbor, MI 48109-1220 UNITED STATES
Co-Auth: LUCIE SCHMIDT
Email: Mailto:Lucille.G.Schmidt@williams.edu
Postal: Williams College
Department of Economics
Fernald House
Williamstown, MA 01267 UNITED STATES
Paper Requests:
Full-Text downloads are available from SSRN Online for $5.
ABSTRACT:
The focus on efficiency costs in the empirical literature on
Disability Insurance (DI) provides a misleading view of the
adequacy of payment levels. In order to evaluate whether workers
are over- or under-insured through the social insurance program,
we develop a framework that allows us to simulate the benefits
as well as the costs associated with marginal changes in payment
generosity from a representative cross-sectional sample of the
population. Under the assumption that individuals are reasonably
risk averse, our simulations suggest the typical worker would
value increased benefits somewhat above the average costs of
providing them. However, we find that benefit increases tend to
lower average utility when we average across all individuals in
our sample, particularly at high levels of risk aversion. This
counterintuitive finding arises because some lower income
DI-insured workers face replacement rates that are near or above
one. For such individuals, a benefit increase would represent
transfers from an even lower income state of the world in which
they are not on DI to one in which they are, a transfer that
would not be beneficial even if there were no behavioral
distortions associated with the provision of DI benefits.
JEL Classification: H21, H22, H31
______________________________
"Retiring Together or Working Alone: The Impact of Spousal
Employment and Disability on Retirement Decisions"
BY: RICHARD W. JOHNSON
Urban Institute
MELISSA FAVREAULT
Urban Institute
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=265143
Other Electronic Document Delivery:
http://www.bc.edu/bc_org/avp/csom/executive/crr/papers
/wp2001-01.pdf
SSRN only offers technical support for papers
downloaded from the SSRN Electronic Paper Collection
location. When URLs wrap, you must copy and paste
them into your browser eliminating all spaces.
Paper ID: CRR Working Paper No. 2001-01
Date: March 2001
Contact: RICHARD W. JOHNSON
Email: Mailto:Rjohnson@ui.urban.org
Postal: Urban Institute
2100 M Street, NW
Washington, DC 20037 UNITED STATES
Phone: 202-261-5541
Fax: 202-833-4388
Co-Auth: MELISSA FAVREAULT
Email: Mailto:mfavreau@ui.urban.org
Postal: Urban Institute
2100 M Street, NW
Washington, DC 20037 UNITED STATES
Paper Requests:
Contact Amy Chasse, Communications Specialist, Center for
Retirement Research, Boston College, Fulton Hall 550, Chestnut
Hill, MA 02467-3808. Phone: (617)552-6783. Fax: (617)552-1750.
Mailto:chassea@bc.edu
ABSTRACT:
Husbands and wives often coordinate retirement decisions, as
many married workers withdraw from the labor force at about the
same time as their spouses. However, joint retirement behavior
may differ for couples in which one spouse retires with health
problems. In those cases, the able-bodied spouse may delay
retirement to compensate for the earnings lost by the disabled
spouse. This paper examines the retirement decisions of husbands
and wives and how they interact with spousal health and
employment, using data from the 1992-1998 waves of the Health
and Retirement Study. The results indicate that both men and
women are more likely to retire if their spouses have already
retired than if they are still working. However, they are less
likely to retire if their spouses appear to have left the labor
force because of health problems, especially when spouses are
not yet eligible for Social Security retirement benefits. There
is no evidence that spousal caregiving demands affect retirement
rates.
Keywords: Retirement, Retirement Policies, Employment,
Disability