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Does Disability Insurance Receipt Discourage Work? Using Examiner Assignment to Estimate Causal Effects of SSDI Receipt

  • Nicole Maestas

    (RAND Corporation)

  • Kathleen Mullen

    (RAND Corporation)

  • Alexander Strand

    (SSA)

We present the first causal estimates of the effect of Social Security Disability Insurance benefit receipt on labor supply using all program applicants. We use new administrative data to match applications to disability examiners, and exploit variation in examiners’ allowance rates as an instrument for benefit receipt. We find that among the estimated 23% of applicants on the margin of program entry, employment would have been 28 percentage points higher had they not received benefits. The effect is heterogeneous, ranging from no effect for those with more severe impairments to 50 percentage points for entrants with relatively less severe impairments.

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File URL: http://www.mrrc.isr.umich.edu/publications/Papers/pdf/wp241.pdf
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Paper provided by University of Michigan, Michigan Retirement Research Center in its series Working Papers with number wp241.

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Length: 47 pages
Date of creation: Aug 2012
Date of revision:
Handle: RePEc:mrr:papers:wp241
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  1. David H. Autor & Mark G. Duggan, 2003. "The Rise in the Disability Rolls and the Decline in Unemployment," The Quarterly Journal of Economics, Oxford University Press, vol. 118(1), pages 157-206.
  2. James J. Heckman & Sergio Urzua & Edward Vytlacil, 2006. "Understanding Instrumental Variables in Models with Essential Heterogeneity," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 389-432, August.
  3. Stock, James H & Wright, Jonathan H & Yogo, Motohiro, 2002. "A Survey of Weak Instruments and Weak Identification in Generalized Method of Moments," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(4), pages 518-29, October.
  4. Maestas, Nicole & Mullen, Kathleen J. & Strand, Alexander, 2012. "Does Disability Insurance Receipt Discourage Work? Using Examiner Assignment to Estimate Causal Effects of SSDI Receipt," Working Papers 853-3, RAND Corporation.
  5. David Autor & Nicole Maestas & Kathleen Mullen & Alexander Strand, 2011. "Does Delay Cause Decay? The Effect of Administrative Decision Time on the Labor Force Participation and Earnings of Disability Applicants," Working Papers wp258, University of Michigan, Michigan Retirement Research Center.
  6. Jonathan Gruber, 1996. "Disability Insurance Benefits and Labor Supply," NBER Working Papers 5866, National Bureau of Economic Research, Inc.
  7. Parsons, Donald O, 1980. "The Decline in Male Labor Force Participation," Journal of Political Economy, University of Chicago Press, vol. 88(1), pages 117-34, February.
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  10. Parsons, Donald O, 1991. "The Health and Earnings of Rejected Disability Insurance Applicants: Comment," American Economic Review, American Economic Association, vol. 81(5), pages 1419-26, December.
  11. Haveman, Robert H & Wolfe, Barbara L, 1984. "The Decline in Male Labor Force Participation: Comment," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 532-41, June.
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  13. Joseph J. Doyle Jr., 2008. "Child Protection and Adult Crime: Using Investigator Assignment to Estimate Causal Effects of Foster Care," Journal of Political Economy, University of Chicago Press, vol. 116(4), pages 746-770, 08.
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  15. Gruber, Jonathan & Kubik, Jeffrey D., 1997. "Disability insurance rejection rates and the labor supply of older workers," Journal of Public Economics, Elsevier, vol. 64(1), pages 1-23, April.
  16. Chen, Susan & van der Klaauw, Wilbert, 2008. "The work disincentive effects of the disability insurance program in the 1990s," Journal of Econometrics, Elsevier, vol. 142(2), pages 757-784, February.
  17. Abadie, Alberto, 2003. "Semiparametric instrumental variable estimation of treatment response models," Journal of Econometrics, Elsevier, vol. 113(2), pages 231-263, April.
  18. Gina Livermore & David Stapleton & Henry Claypool, 2009. "Health Insurance and Health Care Access Before and After SSDI Entry," Mathematica Policy Research Reports e650433d9c134b5e977c28c86, Mathematica Policy Research.
  19. John Bound, 1989. "The Health and Earnings of Rejected Disability Insurance Applicants," NBER Working Papers 2816, National Bureau of Economic Research, Inc.
  20. Joseph J. Doyle Jr., 2007. "Child Protection and Child Outcomes: Measuring the Effects of Foster Care," American Economic Review, American Economic Association, vol. 97(5), pages 1583-1610, December.
  21. Thomas J. Kane & Douglas O. Staiger, 2008. "Estimating Teacher Impacts on Student Achievement: An Experimental Evaluation," NBER Working Papers 14607, National Bureau of Economic Research, Inc.
  22. Andrew J. Houtenville & David C. Stapleton & Robert R. Weathers II & Richard V. Burkhauser (ed.), 2009. "Counting Working-Age People with Disabilities: What Current Data Tell Us and Options for Improvement," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number cwap, November.
  23. Perry, Cynthia D., 2008. "Does treating maternal depression improve child health management The case of pediatric asthma," Journal of Health Economics, Elsevier, vol. 27(1), pages 157-173, January.
  24. Kalamazoo & MI: W.E. Upjohn Institute & Andrew J. Houtenville & David C. Stapleton & Robert R. Weathers II & Richard V. Burkhauser & editors, 2009. "Counting Working-Age People with Disabilities: What Current Data Tell Us and Options for Improvement," Mathematica Policy Research Reports 1aa1fcf4f91a4de5b988924cf, Mathematica Policy Research.
  25. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769, 06-2016.
  26. Haveman, Robert H. & Wolfe, Barbara L., 1984. "Disability transfers and early retirement: a casual relationship?," Journal of Public Economics, Elsevier, vol. 24(1), pages 47-66, June.
  27. repec:mpr:mprres:6274 is not listed on IDEAS
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