Optimal Disability Insurance with Unobservable Skill Heterogeneity

• 발행기관: 한국재정학회(구 한국재정·공공경제학회)
• 저자명: Kyung-woo Lee
• 간행물 정보: 『한국재정학회 학술대회 논문집』2012년도 춘계학술대회 논문집, 462~515쪽, 전체 54쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2012.03.30

영문 초록

This paper studies the optimal disability insurance in a dynamic Mirrlees economy with idiosyncratic labor productivity. Agents in each period face labor productivity and permanent disability shocks, which are both private information. I show that the “no distortion at the top” principle does not hold, due to the incentive for low productivity agents to declare that they are high-skilled and disabled. To quantify the welfare gains of the policy change to the optimal allocation, I compute the equilibrium allocation under the US income tax and disability insurance system and compare it with the optimal allocation for a calibrated version of the economy. The policy change improves the welfare significantly and yields the same welfare gains as a 3.9% of consumption increase for each agent under the current US system. Reduced consumption inequality and more efficient labor allocation in the optimal allocation account for the welfare gains.

목차

Abstract

1. Introduction

2. Two Period Model

3. General Multi-Period Model

4. Quantitative Analysis

5. Concluding Remarks

References