Early Interventions and Disability Insurance: Experience from a Field Experiment This paper estimates the effects of early interventions in the Swedish sickness insurance system. The aim of the interventions is to screen and, further to, rehabilitate sick listed individuals. We find that the early interventions – in contrast to what is expected – increase the inflow into disability benefits by ...

We propose an extended PAYG social security system that conditions pension benefits on the aggregate wage sum and on the wage of one’s children. The latter increases parents’ incentives to provide their children with good within-family education. However, since wages depend stochastically on parents’ unobservable investment in their children’s human capital, some insurance against the productiv...

Because life annuities can increase the level and decrease the volatility of lifetime consumption, economists have long been puzzled by the low demand for life annuities. One potential rational explanation is that adverse selection drives up life annuity prices, which drives down demand. We study the choice between life annuities and lump sums made by 32,000 retiring public employees. These uni...

In this paper, I analyze consumption, aggregate savings,output and welfare implications of …ve di¤erent social security arragements whenever there is demographic uncertanity. Following Bohn(2002), I analyze the e¤ect of an uncetain population growth in an extended version of a modi…ed Life-cycle model developed by Gertler(1999). Population growth dampens savings and output under all arrangement...

Welfare-state measures often tend to persist even when they seem to have become suboptimal due to changes in the economic environment. This paper proposes an information-based explanation for this welfare-state persistence. I present a structural model where rationally inattentive voters decide upon implementations and removals of social insurance. In this model, welfarestate persistence arises...

In order to get a more complete picture of how labor supply is affected by economic incentives, the effects on absenteeism and not just on contracted hours should be taken into account. In particular, absenteeism due to sick leave can be considerable. In this paper we examine whether the level of sick leave compensation affects sick leave behavior. Using time-series data for Sweden spanning a l...

The maximum amount of earnings in a calendar year that can be taxed by Social Security in the U.S. is currently capped at $106,800. In this paper, I use a general-equilibrium overlapping-generations model to examine if removing this cap can solve Social Security’s budgetary problems. I find that in general, removal of the cap increases Social Security revenues, but by only a small percentage, a...

Spousal and Survivor Benefits in Option Value Models of Retirement: An Application to Belgium1 We study retirement incentives with augmented option value model à la Stock and Wise (1990). We propose methodological extensions to better reflect the respective incentives faced by singles and couples. Our results show that a more comprehensive modelling of couples’ incentives leads to very differen...

We construct a dynamic general equilibrium model to analyze the effects of large energy subsidies in a small open economy. The model includes domestic energy production and consumption, trade in energy at world market prices, as well as private and public sector production. The model is calibrated to Egypt and used to study reforms such as reductions in energy subsidies with corresponding reduc...

We provide a lifecycle framework for comparing the insurance value and the incentive cost of disability bene…ts. We estimate the risks that individuals face and the parameters governing the disability insurance program using longitudinal US data on consumption, health, disability insurance, and wages. We characterize the economic e¤ects of disability insurance and study how policy reforms impac...