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An Economic Analysis of the Operation of Social Security Disability Insurance

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  • Howard P. Marvel

Abstract

Social Security Disability Insurance (DI) is federally financed but state administered. States vary widely both in benefit application rates and the rates at which applications are denied. Since the decision to apply depends on the likelihood of qualifying for benefits and since denial rates are influenced by a state's applicant pool, a simultaneous model of application and denial rates is developed in this paper. In addition, recent DI funding problems have induced substantial tightening of applicant screening, at least in some states. Estimates are presented which suggest that while this change may have eliminated some unqualified applicants, it is also likely to have increased cross-state inequities in screening.

Suggested Citation

  • Howard P. Marvel, 1982. "An Economic Analysis of the Operation of Social Security Disability Insurance," Journal of Human Resources, University of Wisconsin Press, vol. 17(3), pages 393-412.
    • Handle: RePEc:uwp:jhriss:v:17:y:1982:i:3:p:393-412
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    Cited by:

    1. Kreider, Brent, 1998. "Workers' Applications to Social Insurance Programs When Earnings and Eligibility Are Uncertain," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 848-877, October.
    2. Valletta, Robert G, 1999. "Declining Job Security," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 170-197, October.
    3. Jaeger, David A & Stevens, Ann Huff, 1999. "Is Job Stability in the United States Falling? Reconciling Trends in the Current Population Survey and Panel Study of Income Dynamics," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 1-28, October.
    4. Gruber, Jonathan & Kubik, Jeffrey D., 1997. "Disability insurance rejection rates and the labor supply of older workers," Journal of Public Economics, Elsevier, vol. 64(1), pages 1-23, April.
    5. repec:eee:labchp:v:3:y:1999:i:pc:p:3417-3528 is not listed on IDEAS
    6. Jonathan Gruber & Jeffrey D. Kubik, 1994. "Disability Insurance Rejection Rates and the Labor Supply of Older Workers," NBER Working Papers 4941, National Bureau of Economic Research, Inc.
    7. Kreider, Brent, 1999. "Social Security Disability Insurance: Applications, Awards, and Lifetime Income Flows," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 784-827, October.
    8. Jonathan S. Leonard, 1985. "Labor Supply Incentives and Disincentives for the Disabled," NBER Working Papers 1744, National Bureau of Economic Research, Inc.
    9. Neumark, David & Polsky, Daniel & Hansen, Daniel, 1999. "Has Job Stability Declined Yet? New Evidence for the 1990s," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 29-64, October.
    10. Gottschalk, Peter & Moffitt, Robert, 1999. "Changes in Job Instability and Insecurity Using Monthly Survey Data," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 91-126, October.
    11. Jonathan Gruber, 2000. "Disability Insurance Benefits and Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 108(6), pages 1162-1183, December.
    12. Bernhardt, Annette & Morris, Martina & Handcock, Mark S & Scott, Marc A, 1999. "Trends in Job Instability and Wages for Young Adult Men," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 65-90, October.
    13. Schmidt, Stefanie R, 1999. "Long-Run Trends in Workers' Beliefs about Their Own Job Security: Evidence from the General Social Survey," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 127-141, October.
    14. Timothy Waidman & John Bound & Austin Nichols, 2003. "Disability Benefits as Social Insurance: Tradeoffs Between Screening Stringency and Benefit Generosity in Optimal Program Design," Working Papers wp042, University of Michigan, Michigan Retirement Research Center.
    15. Lucie Schmidt, 2013. "The New Safety Net? Supplemental Security Income after Welfare Reform," Department of Economics Working Papers 2013-07, Department of Economics, Williams College.
    16. Farber, Henry S, 1999. "Alternative and Part-Time Employment Arrangements as a Response to Job Loss," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 142-169, October.

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