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IZA Discussion Paper No. 8715
December 2014
Financial Work Incentives for Disability Benefit Recipients: Lessons from a Randomised Field Experiment

revised version published in: IZA Journal of Labor Policy, 2015, 4:18

Disability insurance (DI) beneficiaries lose part of their benefits if their earnings exceed certain thresholds (“cash-cliffs”). This implicit taxation is considered the prime reason for low DI outflow. We analyse a conditional cash program that incentivises work related reductions of disability benefits in Switzerland. 4,000 randomly selected DI recipients receive an offer to claim up to CHF 72,000 (USD 71,000) if they expand work hours and reduce benefits. Initial reactions to the program announcement, measured by call-back rates, are modest; individuals at cash-cliffs react more frequently. By the end of the field phase, the take-up rate amounts to only 0.5%.

Kommunikation
Mark Fallak
mark.fallak@liser.lu
+352 585-855-526
World of Labour
Olga Nottmeyer
olga.nottmeyer@liser.lu
+352 585-855-501
Netzwerkkoordination
Christina Gathmann
christina.gathmann@liser.lu

Das IZA@LISER-Netzwerk ist eine weltweite Gemeinschaft für exzellente Forschung in der Arbeitsmarktökonomie und angrenzenden Fachgebieten. Nach dem Wechsel von Bonn wird das Netzwerk nun am Luxembourg Institute of Socio-Economic Research (LISER) koordiniert.

Über das IZA@LISER Network
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