THE ECONOMIC-IMPLICATIONS OF DISABILITY INSURANCE IN CANADA

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.