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Tracking the Household Income of SSDI and SSI Applicants

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Author Info

  • John Bound

    (University of Michigan and NBER)

  • Richard Burkhauser

    (Cornell University)

  • Austin Nichols

    (University of Michigan)

Abstract

Using panel data from the Survey of Income and Program Participation linked to Social Security Administration disability determination records we trace the pattern of household income and the sources of that income from 38 months prior to 39 months following application for Social Security Disability Insurance (SSDI) and Supplemental Security Insurance (SSI). We find that the average applicant’s labor earnings declines dramatically beginning six month before application but the average applicant’s household income drops much less dramatically both in the months just before or just after application and over the next three years, and does so even for those denied benefits. However, we also found substantial heterogeneity in household income outcomes in both the SSDI and SSI applicant population. Our quantile regressions suggest that higher income households experience greater percentage declines in their post-application income. Such results are consistent with the lower replacement rate for higher earners established in the SSDI program and the low absolute level of protection provided to all SSI applicants regardless of income prior to application.

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File URL: http://www.mrrc.isr.umich.edu/publications/Papers/pdf/wp009.pdf
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Bibliographic Info

Paper provided by University of Michigan, Michigan Retirement Research Center in its series Working Papers with number wp009.

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Length: 68 pages
Date of creation: May 2001
Date of revision:
Handle: RePEc:mrr:papers:wp009

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References

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  1. Mary C. Daly & Richard V. Burkhauser, 2000. "The Supplemental Security Income program," Working Paper Series 2001-06, Federal Reserve Bank of San Francisco.
  2. 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 9712001, EconWPA, revised 16 Feb 1998.
  3. Bound, John & Burkhauser, Richard V., 1999. "Economic analysis of transfer programs targeted on people with disabilities," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 51, pages 3417-3528 Elsevier.
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Cited by:
  1. Delia Furtado & Nikolaos Theodoropoulos, 2014. "Immigrant Networks and the Take-Up of Disability Programs: Evidence from US Census Data," Working papers 2014-03, University of Connecticut, Department of Economics.
  2. Andreas Ravndal Kostøl & Magne Mogstad, 2012. "How financial incentives induce disability insurance recipients to return to work," Discussion Papers 685, Research Department of Statistics Norway.
  3. Richard V. Burkhauser & Mary C. Daly, 2002. "Policy Watch: U.S. Disability Policy in a Changing Environment," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 213-224, Winter.
  4. Campolieti, Michele & Riddell, Chris, 2012. "Disability policy and the labor market: Evidence from a natural experiment in Canada, 1998–2006," Journal of Public Economics, Elsevier, vol. 96(3), pages 306-316.
  5. Richard V. Burkhauser & Mary C. Daly & Philip R. de Jong, 2008. "Curing the Dutch Disease: Lessons for United States Disability Policy," Working Papers wp188, University of Michigan, Michigan Retirement Research Center.
  6. Laura Turner & Giovanni Gallipoli, 2011. "Social Security, Endogenous Retirement, and Intrahousehold Cooperation," 2011 Meeting Papers 935, Society for Economic Dynamics.
  7. Lucie Schmidt, 2012. "The Supplemental Security Income Program and welfare reform," Public Policy Discussion Paper 12-3, Federal Reserve Bank of Boston.
  8. Markussen, Simen & Mykletun, Arnstein & Røed, Knut, 2012. "The case for presenteeism — Evidence from Norway's sickness insurance program," Journal of Public Economics, Elsevier, vol. 96(11), pages 959-972.
  9. 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.
  10. Richard W. Johnson & Melissa M. Favreault & Corina Mommaerts, 2009. "Work Ability and the Social Insurance Safety Net in the Years Prior to Retirement," Working Papers, Center for Retirement Research at Boston College wp2009-28, Center for Retirement Research, revised Nov 2009.
  11. Chen, Susan & van der Klaauw, Wilbert, 2008. "The work disincentive effects of the disability insurance program in the 1990s," Journal of Econometrics, Elsevier, vol. 142(2), pages 757-784, February.
  12. 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, vol. 20(3), pages 71-96, Summer.
  13. Richard V. Burkhauser & J. S. Butler & Gulcin Gumus, 2004. "Dynamic programming model estimates of Social Security Disability Insurance application timing," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(6), pages 671-685.
  14. Susan E. Chen, 2012. "Spousal Labor Supply Responses to Government Programs: Evidence from the Disability Insurance Program," Working Papers wp261, University of Michigan, Michigan Retirement Research Center.
  15. Burkhauser, Richard V. & Butler, J. S. & Gumus, Gulcin, 2003. "Option Value and Dynamic Programming Model Estimates of Social Security Disability Insurance Application Timing," IZA Discussion Papers 941, Institute for the Study of Labor (IZA).
  16. Perry Singleton, 2009. "The Effective Target of the Social Security Disability Benefits Reform Act of 1984," Center for Policy Research Working Papers 119, Center for Policy Research, Maxwell School, Syracuse University.

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