This paper develops a sufficient statistics framework for analyzing the welfare effects of disability insurance (DI). We derive social‐optimality conditions for the two main DI policy parameters: (i) eligibility rules and (ii) benefit levels. Applying this framework to two restrictive DI reforms in Austria, we find that tighter DI eligibility rules triggered higher fiscal cost savings and lower insurance losses. Hence, tighter DI eligibility rules dominate DI benefit reductions in scaling back the Austrian DI system.

This article explores the relationship between the duration of a vacancy and the starting wage of a new job, using linked data on vacancies, the posting establishments, and the workers eventually filling the vacancies. The unique combination of large-scale, administrative worker, establishment, and vacancy data is critical for separating establishment- and job-level determinants of vacancy duration from worker-level heterogeneity. Conditional on observables, we find that vacancy duration is negatively correlated with the starting wage and its establishment component, with precisely estimated elasticities of −0.07 and −0.21, respectively. While the negative relationship is qualitatively consistent with search-theoretic models where firms use the wage as a recruiting device, these elasticities are small, suggesting that firms’ wage policies can account only for a small fraction of the variation in vacancy filling across establishments.