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The Employment Effects of Terminating Disability Benefits

Author

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  • Timothy J. Moore

    (Department of Economics, The George Washington University; and National Bureau of Economic Research)

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 percent 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 2-3 years had the largest response, suggesting that a period of public assistance may maximize the employment of some disabled individuals.

Suggested Citation

  • Timothy J. Moore, 2015. "The Employment Effects of Terminating Disability Benefits," Melbourne Institute Working Paper Series wp2015n02, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  • Handle: RePEc:iae:iaewps:wp2015n02
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    More about this item

    Keywords

    Disability insurance; social security; health capital; labor force participation;
    All these keywords.

    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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