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Unemployment Insurance and Disability Insurance in the Great Recession

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  • Andreas I. Mueller
  • Jesse Rothstein
  • Till M. von Wachter

Abstract

Disability insurance (DI) applications and awards are countercyclical. One potential explanation is that unemployed individuals who exhaust their Unemployment Insurance (UI) benefits use DI as a form of extended benefits. We exploit the haphazard pattern of UI benefit extensions in the Great Recession to identify the effect of UI exhaustion on DI application, using both aggregate data at the state-month and state-week levels and microdata on unemployed individuals in the Current Population Survey. We find no indication that expiration of UI benefits causes DI applications. Our estimates are sufficiently precise to rule out effects of meaningful magnitude.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19672.

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Date of creation: Nov 2013
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Publication status: Forthcoming: Unemployment Insurance and Disability Insurance in the Great Recession , Jesse Rothstein. in The Labor Market in the Aftermath of the Great Recession , Mas and Card. 2014
Handle: RePEc:nbr:nberwo:19672

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  1. David H. Autor & Mark G. Duggan, 2003. "The Rise In The Disability Rolls And The Decline In Unemployment," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 118(1), pages 157-205, February.
  2. Pascal Michaillat & Emmanuel Saez & Camille Landais, 2011. "Optimal Unemployment Insurance over the Business Cycle," 2011 Meeting Papers 124, Society for Economic Dynamics.
  3. 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.
  4. Dan Black & Kermit Daniel & Seth Sanders, 2002. "The Impact of Economic Conditions on Participation in Disability Programs: Evidence from the Coal Boom and Bust," American Economic Review, American Economic Association, vol. 92(1), pages 27-50, March.
  5. Mark Duggan & Scott A. Imberman, 2009. "Why Are the Disability Rolls Skyrocketing? The Contribution of Population Characteristics, Economic Conditions, and Program Generosity," NBER Chapters, in: Health at Older Ages: The Causes and Consequences of Declining Disability among the Elderly, pages 337-379 National Bureau of Economic Research, Inc.
  6. Stephan Lindner & Austin Nichols, 2012. "The Impact of Temporary Assistance Programs on Disability Rolls and Re-Employment," Working Papers, Center for Retirement Research at Boston College wp2012-2, Center for Retirement Research, revised Jan 2012.
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Cited by:
  1. Rothstein, Jesse & Valletta, Robert G., 2014. "Scraping By: Income and Program Participation After the Loss of Extended Unemployment Benefits," IZA Discussion Papers 8022, Institute for the Study of Labor (IZA).
  2. Aaronson, Stephanie & Cajner, Tomaz & Fallick, Bruce C. & Galbis-Reig, Felix & Smith, Christopher & Wascher, William L., 2014. "Labor Force Participation: Recent Developments and Future Prospects," Working Paper 1410, Federal Reserve Bank of Cleveland.
  3. Olivier Coibion & Yuriy Gorodnichenko & Dmitri Koustas, 2013. "Amerisclerosis? The Puzzle of Rising U.S. Unemployment Persistence," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 47(2 (Fall)), pages 193-260.
  4. 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.

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