Financial Incentives and Earnings of Disability Insurance Recipients: Evidence from a Notch Design
利用奥地利残疾保险的收入阈值缺口，研究发现受益人收入集中在阈值附近，但弹性较小，放松阈值仅在参保进入非常缺乏弹性时才能降低财政成本。
Most countries reduce disability insurance (DI ) benefits for beneficiaries earning above a specified threshold. Such an earnings threshold generates a discontinuous increase in tax liability—a notch—and creates an incentive to keep earnings below the threshold. Exploiting such a notch in Austria, we provide transparent and credible identification of the effect of financial incentives on DI beneficiaries’ earnings. Using rich administrative data, we document large and sharp bunching at the earnings threshold. However, the elasticity driving these responses is small. Our estimate suggests that relaxing the earnings threshold reduces fiscal cost only if program entry is very inelastic.