Jump to ContentJump to Main Navigation

The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol , Emmanuelle / Brunner, Johann / Fleck, Robert / Friebel, Guido / Mendola, Mariapia / Requate, Till / Tsui, Kevin / Wichardt, Philipp / Zulehner, Christine

4 Issues per year

IMPACT FACTOR 2014: 0.336
5-year IMPACT FACTOR: 0.848

SCImago Journal Rank (SJR) 2014: 0.633
Source Normalized Impact per Paper (SNIP) 2014: 0.606
Impact per Publication (IPP) 2014: 0.640


The Labor Supply Consequences of Employment-Limiting Social Insurance Benefits: New Tests for Income Effects

Henry R Hyatt1

1U.S. Census Bureau,

Citation Information: The B.E. Journal of Economic Analysis & Policy. Volume 11, Issue 1, ISSN (Online) 1935-1682, DOI: 10.2202/1935-1682.2641, May 2011

Publication History

Published Online:


Studies of moral hazard in employment-limiting social insurance programs such as Unemployment Insurance or Workers Compensation have demonstrated that higher benefits discourage work, emphasizing the price distortion inherent in benefit provision. Utilizing administrative data linking Workers’ Compensation claim records to wage records from an Unemployment Insurance payroll tax database, I explore a different explanation and implement tests for “income effects” that exploit the fact that claimants no longer experience a distorted price of non-employment after an employment-limiting benefit ends. A pair of legislative changes to a Workers’ Compensation benefit rate show little or no evidence of income effects and moderate evidence of income effects, respectively.

Keywords: workers’ compensation; labor supply; social insurance

Comments (0)

Please log in or register to comment.