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What happens when you wait? Effects of Social Security Disability Insurance wait time on health and financial well‐being

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  • Sarah Prenovitz

Abstract

While waiting for a decision, individuals who apply for Social Security Disability Insurance face strong incentives to remain out of the labor force and receive no support from the program. An extended period with low income, high uncertainty, and lowered access to health insurance has the potential to harm applicants' well‐being along many dimensions. In this study, I estimate the effect of initial wait time on health, healthcare access, and financial well‐being, using the prevailing wait at the time an applicant applied as an instrument for their own initial wait. I find that a longer wait decreases the likelihood that an applicant has benefits terminated at the time of survey and increases the likelihood that they are currently receiving benefits, consistent with prior findings that longer waits decrease future work and earnings. Wait time also increases the number of conditions causing activity limitations. This suggests that new or worsening medical conditions contribute to the effect of wait time on employment and earnings, and that wait time has effects that extend beyond labor force outcomes.

Suggested Citation

  • Sarah Prenovitz, 2021. "What happens when you wait? Effects of Social Security Disability Insurance wait time on health and financial well‐being," Health Economics, John Wiley & Sons, Ltd., vol. 30(3), pages 491-504, March.
  • Handle: RePEc:wly:hlthec:v:30:y:2021:i:3:p:491-504
    DOI: 10.1002/hec.4203
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    References listed on IDEAS

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    1. Chris Sampson’s journal round-up for 8th March 2021
      by Chris Sampson in The Academic Health Economists' Blog on 2021-03-08 12:00:01

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