Beyond Health: Nonhealth Risk and the Value of Disability Insurance

The public debate over disability insurance has centered on concerns about individuals without severe health conditions receiving benefits. We go beyond risk alone to quantify the overall value of U.S. programs, including from insuring nonhealth risk. find that recipients, especially those with less‐severe conditions, are much more likely have experienced a wide variety shocks than nonrecipients. Selection into receipt basis is so strong among by many measures recipients worse off more‐severe recipients. As result, under baseline assumptions, benefits an annual surplus (insurance benefit less efficiency cost) cost‐equivalent tax cuts $7700 per recipient, three‐fourths ($9900). Insurance against accounts for one‐half programs.