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Work Ability and the Social Insurance Safety Net in the Years Prior to Retirement

Author

Listed:
  • Richard W. Johnson
  • Melissa M. Favreault
  • Corina Mommaerts

Abstract

A patchwork of public programs—primarily Social Security Disability Insurance (DI), workers’ compensation, Supplemental Security Income (SSI), and veterans’ benefits—provides income supports to people unable to work. Yet, questions persist about the effectiveness of these programs. This report examines the economic consequences of disability for a sample of Americans observed from age 51 to 64. The results underscore the precarious financial state for most people approaching traditional retirement age with disabilities. Disability rates roughly double from age 55 to 64. Fewer than half who meet our disability criteria ever receive disability benefits in their fifties or early sixties. Benefit receipt rates are much higher among those with the most severe disabilities, suggesting that benefits are targeted to those least able to work. However, even when models control for disability severity, women are less likely than men to receive benefits. Those with cancer and heart problem diagnoses are more likely to receive DI, suggesting that DI favors workers with certain medical diagnoses. Poverty rates for people who collect disability benefits in their fifties and early sixties more than triple following benefit receipt.

Suggested Citation

  • 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.
  • Handle: RePEc:crr:crrwps:wp2009-28
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    File URL: http://crr.bc.edu/working-papers/work-ability-and-the-social-insurance-safety-net-in-the-years-prior-to-retirement/
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    References listed on IDEAS

    as
    1. Arie Kapteyn & James P. Smith & Arthur van Soest, 2009. "Work Disability, Work, and Justification Bias in Europe and the U.S," Working Papers wp207, University of Michigan, Michigan Retirement Research Center.
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    4. 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, pages 71-96.
    5. Benitez-Silva, Hugo & Buchinsky, Moshe & Chan, Hiu Man & Rust, John & Sheidvasser, Sofia, 1999. "An empirical analysis of the social security disability application, appeal, and award process," Labour Economics, Elsevier, pages 147-178.
    6. Dwyer, Debra Sabatini & Mitchell, Olivia S., 1999. "Health problems as determinants of retirement: Are self-rated measures endogenous?," Journal of Health Economics, Elsevier, pages 173-193.
    7. Richard W. Johnson & Gordon B.T. Mermin, 2009. "Financial Hardship Before and After Social Security's Early Eligibility Age," Working Papers, Center for Retirement Research at Boston College wp2009-8, Center for Retirement Research, revised Mar 2009.
    8. Bruce D. Meyer & Wallace K. C. Mok & James X. Sullivan, 2009. "The Under-Reporting of Transfers in Household Surveys: Its Nature and Consequences," Working Papers 0903, Harris School of Public Policy Studies, University of Chicago.
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    12. repec:mpr:mprres:6064 is not listed on IDEAS
    13. 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, pages 71-96.
    14. John Bound & Richard Burkhauser & Austin Nichols, 2001. "Tracking the Household Income of SSDI and SSI Applicants," Working Papers wp009, University of Michigan, Michigan Retirement Research Center.
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