Disability Insurance Benefits and Labor Supply Decisions: Evidence from a Discontinuity in Benefit Awards

The effect of disability insurance (DI) benefits on the labor supply of individuals is a disputed topic in both academia and policy. We identify the impact of DI benefits on working full-time, part-time or being out of the labor force by exploiting a discontinuity in the DI benefit award rate in Switzerland above the age of 55. Using rich survey data, we find that a DI benefit receipt increases the probability of working part-time by about 32%-points, decreases the probability of working full-time by about 35%-points, but has little or no effect on the probability of being out of the labor force for the average beneficiary. We find evidence for substantial effect heterogeneity with men more likely adjusting their labor supply from working full-time to part-time, whereas women tend to drop out of the labor market. At the same time, while middle- to high-income and relatively healthy DI beneficiaries are more likely to switch from full-time to part-time employment, low-income and very ill people tend to drop out of the labor force entirely. Our results shed new light on the mechanisms explaining low DI outflow rates and may help to better target interventions

Disability Insurance Benefits and Labor Supply Choices: Evidence from a Discontinuity in Benefit Awards

This paper explores the effects of disability insurance (DI) benefits on the labor market decision of existing DI beneficiaries using a fuzzy regression discontinuity (RD) design. We identify the effect of DI benefits on the decision of working full-time, part-time or staying out of the labor force by exploiting a discontinuity in the DI benefit award rate above the age of 55. Overall, our results suggest that the Swiss DI system creates substantial lock-in effects which heavily influence the labor supply decision of existing beneficiaries: the benefit receipt increases the probability of working part-time by about 41%-points, decreases the probability of working full-time by about 42%-points but has little or no effects on the probability of staying out of the labor force for the average beneficiary. Therefore, DI benefits induce a shift in the labor supply of existing beneficiaries in the sense that they reduce their work intensity from working full-time to part-time which adds a possible explanation for the low DI outflow observed all across the OECD

Disability Insurance Benefits and Labor Supply Decisions: Evidence from a Discontinuity in Benefit Awards

This paper explores the effects of disability insurance (DI) benefits on the labor market decision of existing DI beneficiaries using data from the Swiss Household Panel. We use a fuzzy regression discontinuity (RD) design to identify the effect of DI benefits on the decision of working full-time, part-time or staying out of the labor force by exploiting a discontinuity in the DI benefit award rate. Overall, our results suggest that the Swiss DI system creates substantial lock-in effects which heavily influence the working decision of existing beneficiaries: the benefit receipt increases the probability of working part-time by about 41%-points, decreases the probability of working full-time by about 42%-points but has little or no effects on the probability of staying out of the labor force for the average beneficiary. Therefore, DI benefits induce a shift in the labor supply of existing beneficiaries in the sense that they reduce their work intensity from working full-time to part-time adding a possible explanation for the low DI outflow across the OECD

Hochqualifizierte in einer globalisierten Arbeitswelt: von der Erosion der "Beitragsorientierung" zu neuen Arbeitnehmeridentitäten

Die Diskussion zu "Off/Nearshoring" signalisiert, dass neben der Internationalisierung der industriellen Produktion mittlerweile auch die Arbeit von Angestellten und Hochqualifizierten zu einem Gegenstand internationaler Arbeitsteilung werden kann. Auch diese Beschäftigtengruppen müssen sich in der Folge mit den "Schattenseiten" der Globalisierung auseinandersetzen. In betroffenen Bereichen wie der IT-Industrie verändern sich damit zentrale Koordinaten der Arbeit von Hochqualifizierten: neue Formen der Standortkonkurrenz, die Standardisierung vieler Arbeitsprozesse und neue Formen der Kontrolle, die auf einer gesteigerten Austauschbarkeit der Beschäftigten setzen, führen dazu, dass ihre Arbeit in neuer Qualität den Charakter einer "echten" Lohnarbeit erhält. Aufbauend auf einer umfangreichen Empirie im Bereich Software und IT-Dienstleistungen stellt der Aufsatz die Frage, wie hochqualifizierte Beschäftigte diese Veränderungen erleben, welche Spuren sie "in ihren Köpfen" hinterlassen und welche Folgen sich für ihr Interessenhandeln ergeben. Es kann gezeigt werden, dass die Beschäftigten bereits seit der Krise der New Economy im Zuge einer "Zeitenwende" in der IT-Industrie neue Lohnarbeitserfahrungen machen, die sich im Zuge einer neuen "Phase der Internationalisierung" jedoch weiter vertiefen. Mit Blick auf die Entwicklung der "Interessenidentitäten" der Beschäftigten können wir in der Folge zwei zentrale Prozesse identifizieren: auf der einen Seite einen Prozess der Erosion der vormals hegemonialen "Beitragsorientierung" und auf der anderen Seite die Entstehung neuer Arbeitnehmeridentitäten. Diese, mitunter widersprüchlichen Neuorientierungsprozesse verlaufen dabei in einem Spannungsfeld aus "Arbeitnehmern wider Willen" und "manifesten Arbeitnehmer".The debate concerning "Off/Nearshoring" indicates that in addition to the internationalization of industrial manufacturing in certain segments of highly-skilled "white collar" work, new opportunities for an international division of labour are arising. As a consequence, highly-skilled employees and specialists must face new risks associated with globalization. In certain industries, such as the IT-sector, crucial parameters and conditions of highly-skilled labour are changing as a result: new competition on "global labour markets", the standardization of labour processes, and new modes of control based on an increased exchangeability of the single "knowledge-worker" are beginning to transform highly-skilled jobs into "real" wage-labour. Based on comprehensive empirical research in the field of software-development and IT-services, this paper addresses the question how highly-qualified employees perceive these changes and how they affect their "consciousness" and identities. We argue that since the crisis of the New Economy, employees of the IT-Industry have been aware of a "commodification" of their labour-power - an experience that is now being confirmed and intensified by globalization processes. As a consequence, the identities of highly-qualified employees are shifting. We have identified a significant erosion of the typical "Beitragsorientierung" - which is based on the idea of participation and the perception of a "partnership" between highly-skilled employees and their employers. Furthermore, there are tendencies towards new highly-skilled employee identities that imply a recognition of conflicting interests and a growing self-conception of being a "normal" employee or even a "wage-worker"

Disability Insurance Benefits and Labor Supply Decisions: Evidence from a Discontinuity in Benefit Awards

This paper explores the effects of disability insurance (DI) benefits on the labor market decision of existing DI beneficiaries using data from the Swiss Household Panel. We use a fuzzy regression discontinuity (RD) design to identify the effect of DI benefits on the decision of working full-time, part-time or staying out of the labor force by exploiting a discontinuity in the DI benefit award rate. Overall, our results suggest that the Swiss DI system creates substantial lock-in effects which heavily influence the working decision of existing beneficiaries: the benefit receipt increases the probability of working part-time by about 41%-points, decreases the probability of working full-time by about 42%-points but has little or no effects on the probability of staying out of the labor force for the average beneficiary. Therefore, DI benefits induce a shift in the labor supply of existing beneficiaries in the sense that they reduce their work intensity from working full-time to part-time adding a possible explanation for the low DI outflow across the OECD