Template-Type: ReDIF-Paper 1.0
Title: Measuring the Value of Disability Insurance from Take-Up Decisions
Author-Name: Andreas Haller
Author-Name: Stefan Staubli
Creation-date: 2026
Abstract: The central trade-off for designing Disability Insurance (DI) is between providing insurance to those in need while maintaining incentives to work. This paper develops a novel revealed-preference approach to identify the insurance value of DI benefits. We show that comparing the DI take-up response to a change in benefits versus a change in wages identifies the insurance value. Implementing our framework in Canada, we estimate that increasing DI benefits by $1 creates an additional disincentive cost of $0.60 but creates an insurance value of $2.20. Thus, our approach suggests that DI benefits are not overly generous in the Canadian context.
Classification-JEL: H53; H55; J14; J21.
Keywords: Disability insurance, take-up, benefits, policy reform.
File-URL: https://ire.hec.ca/wp-content/uploads/2026/07/cahier_IRE_26_measuring_disability_insurance_take_up_decisions.pdf
File-Size: 920
Handle: RePEc:rsi:irersi:26