Optimal Disability Insurance Payments with Health and Employment Effects
Investigators: Alexander Gelber (PI; UC Berkeley & NBER) and Timothy Moore (Purdue & NBER)

This project models the competing considerations in setting DI benefit levels and develops an empirical approach for analyzing them. The model is designed to balance the welfare benefits of allowing people with disabilities to maintain their consumption against the welfare losses of reduced labor supply that is induced by DI eligibility. The project develops an “optimal” insurance framework to account for DI payments’ positive effect on life expectancy, and then uses administrative data to estimate what level of benefits balances these priorities optimally.

Measuring sources of income and adequacy
Labor force participation
Replacement rates
Optimal disability insurance
Life expectancy
Labor force participation