MARC Record from Library of Congress

LEADER: 02596cam a22003017a 4500
001 2005618918
003 DLC
005 20080814181117.0
007 cr |||||||||||
008 050915s2005 mau sb 000 0 eng
010 $a 2005618918
040 $aDLC$cDLC$dDLC
050 00 $aHB1
100 1 $aChandra, Amitabh.
245 10 $aDisability risk and the value of disability insurance$h[electronic resource] /$cAmitabh Chandra, Andrew A. Samwick.
260 $aCambridge, MA :$bNational Bureau of Economic Research,$cc2005.
490 1 $aNBER working paper series ;$vworking paper 11605
538 $aSystem requirements: Adobe Acrobat Reader.
538 $aMode of access: World Wide Web.
500 $aTitle from PDF file as viewed on 9/15/2005.
530 $aAlso available in print.
504 $aIncludes bibliographical references.
520 3 $a"We estimate consumers' valuation of disability insurance using a stochastic lifecycle framework inwhich disability is modeled as permanent, involuntary retirement. We base our probabilities of worklimiting disability on 25 years of data from the Current Population Survey and examine the changes in the disability gradient for different demographic groups over their lifecycle. Our estimates show that a typical consumer would be willing to pay about 5 percent of expected consumption to eliminate the average disability risk faced by current workers. Only about 2 percentage points reflect the impact of disability on expected lifetime earnings; the larger part is attributable to the uncertainty associated with the threat of disablement. We estimate that no more than 20 percent of mean assets accumulated before voluntary retirement are attributable to disability risks measured for any demographic group in our data. Compared to other reductions in expected utility of comparable amounts, such as a reduction in the replacement rate at voluntary retirement or increases in annual income fluctuations, disability risk generates substantially less pre-retirement saving. Because the probability of disablement is small and the average size of the loss--conditional on becoming disabled--is large, disability risk is not effectively insured through precautionary saving"--National Bureau of Economic Research web site.
650 0 $aDisability insurance$zUnited States$xEconometric models.
700 1 $aSamwick, Andrew.
710 2 $aNational Bureau of Economic Research.
830 0 $aWorking paper series (National Bureau of Economic Research : Online) ;$vworking paper no. 11605.
856 40 $uhttp://papers.nber.org/papers/W11605