Suppose that the disability insurance (DI)program was changed so that individuals who want to receive DI must first go 10 months without working to demonstrate that they are truly disabled instead of the current 5 months.
(a)How would this change affect the moral hazard costs of DI?
(b)A critic of this change does some research and finds out that the acceptance rate (the share of those applying who are accepted into the program)of the DI program increased as a result of the change.He says that this is evidence that the change in the program has increased the moral hazard costs associated with workers' compensation.What do you think?

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The Answer of Suppose that the disability insurance (DI)program was changed so that individuals who want to receive DI must first go 10 months without working to demonstrate that they are truly disabled instead of the current 5 months.
(a)How would this change affect the moral hazard costs of DI?
(b)A critic of this change does some research and finds out that the acceptance rate (the share of those applying who are accepted into the program)of the DI program increased as a result of the change.He says that this is evidence that the change in the program has increased the moral hazard costs associated with workers' compensation.What do you think?

Suppose That the Disability Insurance (DI)program Was Changed So That