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Work Ability and the Social Insurance Safety Net in the Years Prior to Retirement

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  • Richard W. Johnson
  • Melissa M. Favreault
  • Corina Mommaerts

Abstract

A patchwork of public programs—primarily Social Security Disability Insurance (DI), workers’ compensation, Supplemental Security Income (SSI), and veterans’ benefits—provides income supports to people unable to work. Yet, questions persist about the effectiveness of these programs. This report examines the economic consequences of disability for a sample of Americans observed from age 51 to 64. The results underscore the precarious financial state for most people approaching traditional retirement age with disabilities. Disability rates roughly double from age 55 to 64. Fewer than half who meet our disability criteria ever receive disability benefits in their fifties or early sixties. Benefit receipt rates are much higher among those with the most severe disabilities, suggesting that benefits are targeted to those least able to work. However, even when models control for disability severity, women are less likely than men to receive benefits. Those with cancer and heart problem diagnoses are more likely to receive DI, suggesting that DI favors workers with certain medical diagnoses. Poverty rates for people who collect disability benefits in their fifties and early sixties more than triple following benefit receipt.

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File URL: http://crr.bc.edu/working-papers/work-ability-and-the-social-insurance-safety-net-in-the-years-prior-to-retirement/
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Bibliographic Info

Paper provided by Center for Retirement Research in its series Working Papers, Center for Retirement Research at Boston College with number wp2009-28.

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Length: 60 pages
Date of creation: Nov 2009
Date of revision: Nov 2009
Handle: RePEc:crr:crrwps:wp2009-28

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  1. Steven Haider & Gary Solon, 2000. "Non Random Selection in the HRS Social Security Earnings Sample," Working Papers, RAND Corporation Publications Department 00-01, RAND Corporation Publications Department.
  2. Bruce D. Meyer & Wallace K. C. Mok & James X. Sullivan, 2009. "The Under-Reporting of Transfers in Household Surveys: Its Nature and Consequences," Working Papers, Harris School of Public Policy Studies, University of Chicago 0903, Harris School of Public Policy Studies, University of Chicago.
  3. John L. Czajka & James Mabli & Scott Cody, 2008. "Sample Loss and Survey Bias in Estimates of Social Security Beneficiaries: A Tale of Two Surveys," Mathematica Policy Research Reports, Mathematica Policy Research 6064, Mathematica Policy Research.
  4. Julian Cristia & Jonathan A. Schwabish, 2007. "Measurement Error in the SIPP: Evidence from Matched Administrative Records: Working Paper 2007-03," Working Papers, Congressional Budget Office 18322, Congressional Budget Office.
  5. John Bound & Richard Burkhauser & Austin Nichols, 2001. "Tracking the Household Income of SSDI and SSI Applicants," Working Papers, University of Michigan, Michigan Retirement Research Center wp009, University of Michigan, Michigan Retirement Research Center.
  6. Hugo Benitez-Silva & Moshe Buchinsky & Hiu-Man Chan & John Rust & Sofia Sheivasser, 1997. "An Empirical Analysis of the Social Security Disability Application, Appeal, and Award Process," Public Economics, EconWPA 9712001, EconWPA, revised 16 Feb 1998.
  7. Dwyer, Debra Sabatini & Mitchell, Olivia S., 1999. "Health problems as determinants of retirement: Are self-rated measures endogenous?," Journal of Health Economics, Elsevier, Elsevier, vol. 18(2), pages 173-193, April.
  8. Kerwin Kofi Charles & Melvin Stephens, 2004. "Job Displacement, Disability, and Divorce," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 22(2), pages 489-522, April.
  9. David H. Autor & Mark G. Duggan, 2006. "The Growth in the Social Security Disability Rolls: A Fiscal Crisis Unfolding," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 20(3), pages 71-96, Summer.
  10. Arie Kapteyn & James P. Smith & Arthur van Soest, 2009. "Work Disability, Work, and Justification Bias in Europe and the U.S," Working Papers, University of Michigan, Michigan Retirement Research Center wp207, University of Michigan, Michigan Retirement Research Center.
  11. Richard W. Johnson & Gordon B.T. Mermin, 2009. "Financial Hardship Before and After Social Security's Early Eligibility Age," Working Papers, Center for Retirement Research at Boston College, Center for Retirement Research wp2009-8, Center for Retirement Research, revised Mar 2009.
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