Privatizing Disability Insurance
研究德国公共残疾保险削减后，自愿私人保险市场能否提升福利，发现私人保险吸引高收入、高教育、低风险人群，虽能改善福利但存在分配问题。
Public disability insurance (DI) programs in many countries face growing fiscal pressures, prompting efforts to reduce spending. In this paper, we investigate the welfare effects of expanding the role of private insurance markets in the face of public DI cuts. We exploit a reform that abolished one part of German public DI and use unique data from a large insurer. We document modest crowding‐out effects of the reform, such that private DI take‐up remains incomplete. We find no adverse selection in the private DI market. Instead, private DI tends to attract individuals with high income, high education, and low disability risk. Using a revealed preference approach, we estimate individual insurance valuations. Our welfare analysis finds that partial DI provision via the voluntary private market can improve welfare. However, distributional concerns may justify a full public DI mandate.