Publication type
Research Paper
Series Number
2009-31
Series
Finance and Economics Discussion Series
Authors
Publication date
June 1, 2009
Abstract:
In this paper we show the extent to which public insurance and self-insurance mitigate the cost of health shocks that limit the ability to work. We use consumption data from the UK to estimate the insurance provided by the government disability programme and account for the effectiveness of alternative self-insurance mechanisms. Individuals with a work-limiting health condition, but in receipt of disability insurance, have 7% lower consumption than those without such a condition. Self-insurance through savings and a working partner each provide some insurance benefit, improving outcomes from 2% to 4%. Reductions in the generosity of incapacity benefit after 1995 are associated with increases in the consumption loss associated with disability.
Subjects
Link
- http://www.federalreserve.gov/pubs/feds/2009/index.html
Notes
discussion paper
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