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Petra Thiemann . Photo

Petra Thiemann

Associate senior lecturer

Petra Thiemann . Photo

Financial Work Incentives for Disability Benefit Recipients : Lessons from a Randomized Experiment

Author

  • Petra Thiemann
  • Michael Lechner
  • Monika Bütler
  • Stefan Staubli
  • Eva Deuchert

Summary, in English

Disability insurance (DI) beneficiaries lose part or all of their benefits if earnings exceed certain thresholds (“cash-cliffs”). This implicit taxation is considered the prime reason for the low number of beneficiaries who expand work and reduce benefit receipt. We analyse a conditional cash programme that incentivises work related reductions of disability benefits in Switzerland. Four thousand DI beneficiaries received an offer to claim up to CHF 72,000 (USD 77,000) if they expand work and reduce benefits. Initial reactions to the programme announcement, measured by call-back rates, are modest. By the end of the field phase, the take-up rate is only 0.5 %.

Publishing year

2015

Language

English

Pages

1-18

Publication/Series

IZA Journal of Labor Policy

Volume

4

Issue

18

Document type

Journal article

Publisher

Springer

Topic

  • Economics

Keywords

  • Disability insurance
  • Field experiment
  • Financial incentive
  • Return-to-work
  • H55
  • J14
  • C93
  • D04

Status

Published

ISBN/ISSN/Other

  • ISSN: 2193-9004