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The Economic Implications of Disability Insurance in Canada

Journal of Labor Economics 1993 11(1, Part 2), S148-S169
The article empirically estimates the effects of disability pensions provided under the Canada / Quebec Pension Plans on the labor-force participation rates of males aged 45-64 years. Two data sets are used. One consists of pooled cross section / annual time-series data by province for the years 1975-83. The other consists of observations as of 1985 on 651 males in the specified age group. Naive estimation results from both sets of data suggest a large negative effect of pension income. In the case of the micro data, this effect becomes small and statistically nonsignificant when more sophisticated estimation methods are used.