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Accounting for Disability Insurance in the Dynamic Relationship Between Disability Onset and Earnings

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  • Perry Singleton

Abstract

The onset of a work-limiting disability coincides with an immediate decline in earnings with little recovery. This study examines whether this relationship is attributable to the labor disincentives of disability insurance. The data come from the Survey of Income and Program Participation linked to administrative data from the Social Security Administration. The analysis suggests that disability insurance accounts for little of the initial drop in earnings at the time of disability onset, but its effect may increase as time since disability onset elapses. The results highlight the advantages of immediate, though temporary disability benefits.

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File URL: http://crr.bc.edu/working-papers/accounting-for-disability-insurance-in-the-dynamic-relationship-between-disability-onset-and-earnings-ii/
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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 wp2010-18.

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Length: 39 pages
Date of creation: Nov 2010
Date of revision: Nov 2010
Handle: RePEc:crr:crrwps:wp2010-18

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