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The employment effects of terminating disability benefits

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  • Moore, Timothy J.

Abstract

Few social security disability insurance (DI) beneficiaries return to the labor force, making it hard to assess their likely employment in the absence of benefits. Using administrative data, I examine the employment of individuals who lost DI eligibility after the 1996 removal of drug and alcohol addictions as qualifying conditions. Approximately 22% started working at levels that would have disqualified them for DI, an employment response that is large relative to their work histories. Those who received DI for 2–3years had the largest response, suggesting that a period of public assistance may maximize the employment of some disabled individuals.

Suggested Citation

  • Moore, Timothy J., 2015. "The employment effects of terminating disability benefits," Journal of Public Economics, Elsevier, vol. 124(C), pages 30-43.
  • Handle: RePEc:eee:pubeco:v:124:y:2015:i:c:p:30-43
    DOI: 10.1016/j.jpubeco.2015.02.004
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    Cited by:

    1. Gordon B. Dahl & Andreas Ravndal Kostøl & Magne Mogstad, 2014. "Family Welfare Cultures," The Quarterly Journal of Economics, Oxford University Press, vol. 129(4), pages 1711-1752.
    2. Johanna Catherine Maclean & Keshar M. Ghimire & Lauren Hersch Nicholas, 2017. "The Effect of State Medical Marijuana Laws on Social Security Disability Insurance and Workers' Compensation Claiming," NBER Working Papers 23862, National Bureau of Economic Research, Inc.
    3. Andreas Ravndal Kostol & Magne Mogstad, 2014. "How Financial Incentives Induce Disability Insurance Recipients to Return to Work," American Economic Review, American Economic Association, vol. 104(2), pages 624-655, February.
    4. Koning, Pierre & van Sonsbeek, Jan-Maarten, 2017. "Making disability work? The effects of financial incentives on partially disabled workers," Labour Economics, Elsevier, vol. 47(C), pages 202-215.
    5. David H. Autor & Mark Duggan & Kyle Greenberg & David S. Lyle, 2016. "The Impact of Disability Benefits on Labor Supply: Evidence from the VA's Disability Compensation Program," American Economic Journal: Applied Economics, American Economic Association, vol. 8(3), pages 31-68, July.
    6. Jeffrey B. Liebman, 2015. "Understanding the Increase in Disability Insurance Benefit Receipt in the United States," Journal of Economic Perspectives, American Economic Association, vol. 29(2), pages 123-150, Spring.
    7. David H. Autor, 2015. "The unsustainable rise of the disability rolls in the United States: causes, consequences and policy options," Chapters,in: Social Policies in an Age of Austerity, chapter 5, pages 107-136 Edward Elgar Publishing.
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      [Absicherung von Personen mit Erwerbsminderung: Erfahrungen aus vier Industrieländern]
      ," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 49(4), pages 367-386, December.
    9. Eugster, Beatrix & Deuchert, Eva, 2017. "Income and Substitution Effects of a Disability Insurance Reform," Economics Working Paper Series 1709, University of St. Gallen, School of Economics and Political Science.
    10. Katharine G. Abraham & Melissa S. Kearney, 2018. "Explaining the Decline in the U.S. Employment-to-Population Ratio: A Review of the Evidence," NBER Working Papers 24333, National Bureau of Economic Research, Inc.
    11. Yonatan Ben-Shalom & David Stapleton & Alex Bryce, "undated". "Trends in SSDI Benefit Receipt: Are More Recent Birth Cohorts Entering Sooner and Receiving Benefits Longer?," Mathematica Policy Research Reports fcf269dc626546faa2d7ce7f2, Mathematica Policy Research.
    12. Alexander Gelber & Timothy J. Moore & Alexander Strand, 2017. "The Effect of Disability Insurance Payments on Beneficiaries' Earnings," American Economic Journal: Economic Policy, American Economic Association, vol. 9(3), pages 229-261, August.
    13. Manasi Deshpande, 2016. "Does Welfare Inhibit Success? The Long-Term Effects of Removing Low-Income Youth from the Disability Rolls," American Economic Review, American Economic Association, vol. 106(11), pages 3300-3330, November.
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    15. Deuchert, E. & Eugster, B., 2016. "Crawling Up the Cash Cliff? Behavioral Responses to a Disability Insurance Reform," Health, Econometrics and Data Group (HEDG) Working Papers 16/21, HEDG, c/o Department of Economics, University of York.
    16. Andersson, Josefine, 2018. "Financial incentives to work for disability insurance recipients - Sweden’s special rules for continuous deduction," Working Paper Series 2018:7, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    17. Shu, Pian, 2015. "Asset accumulation and labor force participation of disability insurance applicants," Journal of Public Economics, Elsevier, vol. 129(C), pages 26-40.
    18. Johanna Catherine Maclean & Lauren Hersch Nicholas & Keshar M. Ghimire, 2017. "The Impact of State Medical Marijuana Laws on Social Security Disability Insurance and Workers' Compensation Benefit Claiming," Working Papers id:12111, eSocialSciences.
    19. Müller, Tobias & Boes, Stefan, 2016. "Disability Insurance Benefits and Labor Supply Choices: Evidence from a Discontinuity in Benefit Awards," MPRA Paper 70957, University Library of Munich, Germany.
    20. Kauer, Lukas, 2014. "The Effect of Cutting Disability Insurance Benefits on Labor Supply in Households," Economics Working Paper Series 1401, University of St. Gallen, School of Economics and Political Science.
    21. Jeffrey Hemmeter & Michelle Stegman Bailey, 2016. "Earnings after DI: evidence from full medical continuing disability reviews," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-22, December.
    22. Michael Levere, "undated". "The Labor Market Consequences of Receiving Disability Benefits During Childhood," Mathematica Policy Research Reports 4a4b6e2d970c4e669ba5f4126, Mathematica Policy Research.

    More about this item

    Keywords

    Disability insurance; Social security; Health capital; Labor force participation;

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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