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Labor supply response to overpayment notifications: Evidence from Social Security Disability Insurance

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  • Priyanka Anand
  • Denise Hoffman
  • John T. Jones
  • Siarhei Lukashanets

Abstract

We use administrative data to provide evidence that notification of work‐related overpayment debt reduces subsequent work activity by Social Security Disability Insurance beneficiaries. We exploit randomness in the timing of the overpayment debt notification by comparing beneficiary work activity before and after notification. Our results show that the share of overpaid beneficiaries engaging in substantial work activity declined by 8% over the 2‐month period following an overpayment notification, which reduced to 4% after accounting for the ongoing declining trend in work activity. This evidence that overpayment debt notification discourages work highlights the need for policies to curtail overpayments.

Suggested Citation

  • Priyanka Anand & Denise Hoffman & John T. Jones & Siarhei Lukashanets, 2022. "Labor supply response to overpayment notifications: Evidence from Social Security Disability Insurance," Contemporary Economic Policy, Western Economic Association International, vol. 40(2), pages 304-322, April.
    • Handle: RePEc:bla:coecpo:v:40:y:2022:i:2:p:304-322
    DOI: 10.1111/coep.12561
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    References listed on IDEAS

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    1. C. Yiwei Zhang & Jeffrey Hemmeter & Judd B. Kessler & Robert D. Metcalfe & Robert Weathers, 2020. "Nudging Timely Wage Reporting: Field Experimental Evidence from the United States Social Supplementary Income Program," NBER Working Papers 27875, National Bureau of Economic Research, Inc.
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    3. repec:mpr:mprres:7076 is not listed on IDEAS
    4. Daniel Gubits & David Stapleton & Stephen Bell & Michelle Wood & Denise Hoffman & Sarah Croake & David R. Mann & Judy Geyer & David Greenberg & Austin Nichols & Andrew McGuirk & Meg Carroll & Utsav Ka, "undated". "BOND Implementation and Evaluation: Final Evaluation Report, Volume 1," Mathematica Policy Research Reports fac39cd85b944c528e7acbb5d, Mathematica Policy Research.
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