The Impact of the 1996 SSI Childhood Disability Reforms: Evidence from Matched SIPP-SSA Data

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 changed the definition of disability used to determine eligibility for disabled children under the Supplemental Security Income (SSI) program and made other changes in the program. The law required the redetermination of eligibility status for children potentially affected by the new definition of disability. As a result, an estimated 100,000 children were expected to lose SSI benefits. The goal of this paper is to understand the impact of benefit loss on affected children and their families. The analysis draws on data from the 1992, 1993 and 1996 panels of the Survey of Income and Program Participation matched with Social Security Administration records on SSI program participation. The data are used to analyze the impact of the loss of SSI income as a result of the 1996 legislation on family labor supply, welfare program participation, and income and poverty. Compared with families that lost SSI benefits due to normal attrition from the program, the excess benefit loss due to the 1996 childhood disability reforms is associated with lower levels of family labor supply, higher levels of participation in AFDC/TANF and food stamps, and lower levels of family income relative to poverty. For some outcomes, these effects—measured one month after benefit loss—persist for up to 12 months.