; ; ; "ActiveFedora::Aggregation::ListSource" . a , ; "Designing Optimal Disability Insurance"; ; "batchuser@example.com"; "Golosov, Mikhail", "Tsyvinski, Aleh"; "Federal Reserve Bank of Minneapolis"; "H30 - Fiscal Policies and Behavior of Economic Agents: General", "E60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General", "H20 - Taxation, Subsidies, and Revenue: General"; "In this paper we describe how to optimally design a disability insurance system. The key friction in the model is imperfectly observable disability. We solve a dynamic mechanism design problem and provide a theoretical and numerical characterization of the social optimum. We then propose a simple tax system that implements an optimal allocation as a competitive equilibrium. The tax system that we propose includes only taxes and transfers that are similar to those already present in the U.S. tax code: a savings tax and an asset-tested transfer program. Using a numerical simulation, we compare our optimal disability system to the current disability system. Our results suggest a significant welfare gain from switching to an optimal system. "^^; "2003-01"; "2019-06-25T13:57:43.342138825+00:00"^^; "https://doi.org/10.21034/wp.628"; ; "https://creativecommons.org/licenses/by-nc/4.0/"; "Wed Oct 23 17:52:42 2019"; "https://creativecommons.org/licenses/by-nc/4.0/"; "Research Paper"; "798", "279"; "Working paper (Federal Reserve Bank of Minneapolis. Research Department)"; "628"; ; ; ; ; "Federal Reserve Bank of Minneapolis. Research Department"; "Published as \"Designing Optimal Disability Insurance: A Case for Asset Testing\" in _Journal of Political Economy_ (Vol. 114, Iss. 2, April 2006, pp. 257-279), https://doi.org/10.1086/500549."^^; ; "Publication" . ; .