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The Interaction of Private and Public Disability Insurance: Moral Hazard, Insurance, and Welfare

Audience: Member of University - ALL Format: In Person
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Applied Microeconomics Seminar

Tuesday, 16 June 2026, 4pm to 5.15pm

I study the interaction between private and public disability insurance (DI). Using comprehensive contract data from a major German insurer combined with representative administrative and survey data, I estimate a dynamic life-cycle model of insurance, savings, and labor supply choices. I find that private DI imposes significant fiscal costs on public DI by increasing public DI claims. As public DI becomes more generous, private DI reduces welfare gains and eventually reduces welfare. Conversely, private DI can offset welfare losses from public cuts, allowing for welfare-enhancing and cost-reducing reforms.

Speaker(s): Sebastian Seitz

Series: Applied Microeconomics Seminar

Venue: Manor Road Building - Skills Lab - Skills Lab Manor Road Building Manor Road Oxford Oxfordshire OX1 3UQ United Kingdom

Department: Economics (Department)