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The effectiveness of financial work incentives in DI and SSI: Lessons from other transfer programs

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  • H. Hoynes
  • R. Moffitt

Abstract

The Disability Insurance Program (DI) and the Supplemental Security Income Program (SSI) are the primary cash transfer programs for the disabled. We compare the potential outcomes of using financial inducements as a means to increase the work incentives to those who are on DI, and an earnings replacement program, or SSI, a means-tested transfer program not tied to previous work experience. Our assessment of the existing research on work incentives in programs for the nondisabled leads us to urge caution in relying on simple financial inducements as means of work-incentive reform without further, concrete evidence of their effectiveness.

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Bibliographic Info

Paper provided by University of Wisconsin Institute for Research on Poverty in its series Institute for Research on Poverty Discussion Papers with number 1073-95.

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Handle: RePEc:wop:wispod:1073-95

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  1. Fortin, B. & Truchon, M., 1990. "On Reforming the Welfare System: Workfare Meets the Negative Income Tax," Cahiers de recherche 9016, Université Laval - Département d'économique.
  2. M. Keane & R. Moffitt, . "A structural model of multiple welfare program participation and labor supply," Institute for Research on Poverty Discussion Papers 1080-96, University of Wisconsin Institute for Research on Poverty.
  3. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March.
  4. Philip de Jong & Robert Haveman & Barbara Wolfe, 1988. "Labor and Transfer Income and Older Women's Work: Estimates From the United States," NBER Working Papers 2728, National Bureau of Economic Research, Inc.
  5. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
  6. Haveman, Robert & Wolfe, Barbara & Warlick, Jennifer, 1988. "Labor market behavior of older men : Estimates from a Trichotomous choice model," Journal of Public Economics, Elsevier, vol. 36(2), pages 153-175, July.
  7. Fraker, Thomas & Moffitt, Robert, 1988. "The effect of food stamps on labor supply : A bivariate selection model," Journal of Public Economics, Elsevier, vol. 35(1), pages 25-56, February.
  8. John Bound, 1989. "The Health and Earnings of Rejected Disability Insurance Applicants," NBER Working Papers 2816, National Bureau of Economic Research, Inc.
  9. Robert Moffitt & Barbara Wolfe, 1990. "The Effect of the Medicaid Program on Welfare Participation and Labor Supply," NBER Working Papers 3286, National Bureau of Economic Research, Inc.
  10. 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.
  11. Hilary Hoynes, 1993. "Welfare Transfers in Two-Parent Families: Labor Supply and Welfare Participation Under AFDC-UP," NBER Working Papers 4407, National Bureau of Economic Research, Inc.
  12. Yelowitz, Aaron S, 1995. "The Medicaid Notch, Labor Supply, and Welfare Participation: Evidence from Eligibility Expansions," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 909-39, November.
  13. Anne E. Winkler, 1991. "The Incentive Effects of Medicaid on Women's Labor Supply," Journal of Human Resources, University of Wisconsin Press, vol. 26(2), pages 308-337.
  14. Danziger, Sheldon & Haveman, Robert & Plotnick, Robert, 1981. "How Income Transfer Programs Affect Work, Savings, and the Income Distribution: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 19(3), pages 975-1028, September.
  15. R. E. Hall, 1974. "The Probability of Dependence on Public Assistance," Working papers 131, Massachusetts Institute of Technology (MIT), Department of Economics.
  16. Burtless, Gary, 1986. "Social Security, Unanticipated Benefit Increases, and the Timing of Retirement," Review of Economic Studies, Wiley Blackwell, vol. 53(5), pages 781-805, October.
  17. Rebecca M. Blank, 1989. "The Effect of Medical Need and Medicaid on AFDC Participation," Journal of Human Resources, University of Wisconsin Press, vol. 24(1), pages 54-87.
  18. Parsons, Donald O, 1980. "The Decline in Male Labor Force Participation," Journal of Political Economy, University of Chicago Press, vol. 88(1), pages 117-34, February.
  19. Jonathan S. Leonard, 1979. "The Social Security Disability Program and Labor Force Participation," NBER Working Papers 0392, National Bureau of Economic Research, Inc.
  20. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-35, December.
  21. Haveman, Robert H. & Wolfe, Barbara L., 1984. "Disability transfers and early retirement: a casual relationship?," Journal of Public Economics, Elsevier, vol. 24(1), pages 47-66, June.
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Cited by:
  1. Levine, David I., 1997. "Reinventing Disability Policy," Institute for Research on Labor and Employment, Working Paper Series qt7cq715wp, Institute of Industrial Relations, UC Berkeley.

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