Abstract:

In 2009 Laron amendment was implemented. Its purpose was to change disabled workers incentives by reforming the formula related to work allowances. We checked the impact of this amendment by analyzing workers behavior after five years of implementation. By comparing disabled workers to workers of similar background that did not receive the allowance we answer to the following questions: what was the impact of Laron ammendment on their work supply? what are the characteristics of workers that substantially reacted to Laron ammendment?