Moral Hazard and Claims Deterrence in Private Disability Insurance
Exploiting within-firm, over-time variation in plan parameters for nearly 10,000 Long Term Disability (LTD) policies held by US employers, we present the first empirical analysis of the determinants of private LTD spells. We find that a shorter waiting period and a higher replacement rate increase t...
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| Other Authors: | |
| Format: | Article |
| Language: | en_US |
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American Economic Association
2015
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| Online Access: | http://hdl.handle.net/1721.1/95951 https://orcid.org/0000-0002-9877-3065 https://orcid.org/0000-0002-6915-9381 |
| _version_ | 1826197920355975168 |
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| author | Duggan, Mark G. Gruber, Jonathan Autor, David H. |
| author2 | Massachusetts Institute of Technology. Department of Economics |
| author_facet | Massachusetts Institute of Technology. Department of Economics Duggan, Mark G. Gruber, Jonathan Autor, David H. |
| author_sort | Duggan, Mark G. |
| collection | MIT |
| description | Exploiting within-firm, over-time variation in plan parameters for nearly 10,000 Long Term Disability (LTD) policies held by US employers, we present the first empirical analysis of the determinants of private LTD spells. We find that a shorter waiting period and a higher replacement rate increase the incidence of LTD spells. Sixty percent of the latter effect is due to the mechanical censoring of shorter spells, with the remainder due to the deterrence of spells that would have continued beyond the waiting period. Deterrence is driven primarily by a reduction in the incidence of shorter duration spells and less severe disabilities. |
| first_indexed | 2024-09-23T10:55:39Z |
| format | Article |
| id | mit-1721.1/95951 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T10:55:39Z |
| publishDate | 2015 |
| publisher | American Economic Association |
| record_format | dspace |
| spelling | mit-1721.1/959512022-09-30T23:58:29Z Moral Hazard and Claims Deterrence in Private Disability Insurance Duggan, Mark G. Gruber, Jonathan Autor, David H. Massachusetts Institute of Technology. Department of Economics Autor, David H. Gruber, Jonathan Exploiting within-firm, over-time variation in plan parameters for nearly 10,000 Long Term Disability (LTD) policies held by US employers, we present the first empirical analysis of the determinants of private LTD spells. We find that a shorter waiting period and a higher replacement rate increase the incidence of LTD spells. Sixty percent of the latter effect is due to the mechanical censoring of shorter spells, with the remainder due to the deterrence of spells that would have continued beyond the waiting period. Deterrence is driven primarily by a reduction in the incidence of shorter duration spells and less severe disabilities. 2015-03-11T16:51:05Z 2015-03-11T16:51:05Z 2014-10 Article http://purl.org/eprint/type/JournalArticle 1945-7782 1945-7790 http://hdl.handle.net/1721.1/95951 Autor, David, Mark Duggan, and Jonathan Gruber. “Moral Hazard and Claims Deterrence in Private Disability Insurance.” American Economic Journal: Applied Economics 6, no. 4 (October 2014): 110–141. © 2014 American Economic Association https://orcid.org/0000-0002-9877-3065 https://orcid.org/0000-0002-6915-9381 en_US http://dx.doi.org/10.1257/app.6.4.110 American Economic Journal: Applied Economics Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use. application/pdf American Economic Association American Economic Association |
| spellingShingle | Duggan, Mark G. Gruber, Jonathan Autor, David H. Moral Hazard and Claims Deterrence in Private Disability Insurance |
| title | Moral Hazard and Claims Deterrence in Private Disability Insurance |
| title_full | Moral Hazard and Claims Deterrence in Private Disability Insurance |
| title_fullStr | Moral Hazard and Claims Deterrence in Private Disability Insurance |
| title_full_unstemmed | Moral Hazard and Claims Deterrence in Private Disability Insurance |
| title_short | Moral Hazard and Claims Deterrence in Private Disability Insurance |
| title_sort | moral hazard and claims deterrence in private disability insurance |
| url | http://hdl.handle.net/1721.1/95951 https://orcid.org/0000-0002-9877-3065 https://orcid.org/0000-0002-6915-9381 |
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