Erasmus School of Economics
Erasmus University Rotterdam
PO Box 1738
3000 DR Rotterdam
Tel: +31 10 4088741
Institutional Affiliation: Erasmus University Rotterdam
Information about this author at RePEc
NBER Working Papers and Publications
|February 2018||Intergenerational Spillovers in Disability Insurance|
with Gordon B. Dahl: w24296
Using a 1993 Dutch policy reform and a regression discontinuity design, we find children of parents whose disability insurance (DI) eligibility was reduced are 11% less likely to participate in DI themselves, do not alter their use of other government programs, and earn 2% more as adults. The reduced transfers and increased taxes of children account for 40% of the fiscal savings relative to parents in present discounted value terms. Moreover, children of treated parents complete more schooling, have a lower probability of serious criminal arrests and incarceration, and take fewer mental health drugs as adults.
|July 2012||Social Support Substitution and the Earnings Rebound: Evidence from a Regression Discontinuity in Disability Insurance Reform|
with Lex Borghans, Erzo F.P. Luttmer: w18261
In this paper, we exploit a cohort discontinuity in the stringency of the 1993 Dutch disability reforms to obtain causal estimates of the effects of decreased generosity of disability insurance (DI) on behavior of existing DI recipients. We find evidence of substantial "social support substitution": individuals on average offset a euro of lost DI benefits by collecting 31 cents more from other social assistance programs. This benefit-substitution effect declines somewhat over time, but is still a significant 20% eight years later. Individuals also exhibit a strong rebound in earnings: labor earnings increase by 62 cents on average per euro of lost DI benefits. This is novel evidence of substantial remaining earnings capacity in a sample of long-term claimants of DI. On average, individua...
Published: Lex Borghans & Anne C. Gielen & Erzo F. P. Luttmer, 2014. "Social Support Substitution and the Earnings Rebound: Evidence from a Regression Discontinuity in Disability Insurance Reform," American Economic Journal: Economic Policy, American Economic Association, vol. 6(4), pages 34-70, November. citation courtesy of