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Factors Determining Participation of the Elderly in SSI

  • Kathleen McGarry
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    The same low participation rates which plague many welfare programs have been observed among the elderly eligible for Supplemental Security Income (SSI). A number of hypotheses have been offered to explain the low enrollment, but none has attracted universal acceptance. In this paper I use the Survey of Income and Program Participation (SIPP) to examine the participation of the elderly in SSI. Because of the high quality of the data, I am able to determine eligibility more accurately than in most previous studies. In this sample, only 56 percent of those whom I determine to be eligible for SSI are presently receiving benefits. I model the decision to participate as a probit equation, but modify the likelihood function to account for measurement error in the expected benefit. The results indicate that participation is primarily determined by the financial situation of the eligible individuals. Although all those eligible for SSI are poor, those with little in the way of other resources are significantly more likely to participate. This finding differs from widespread beliefs that eligible individuals are discouraged by the difficulty of the application process, or that many are uninformed about the program.

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    File URL: http://www.nber.org/papers/w5250.pdf
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    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5250.

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    Date of creation: Sep 1995
    Date of revision:
    Publication status: published as Journal of Human Resources, 1996, vol. 31.
    Handle: RePEc:nbr:nberwo:5250
    Note: AG
    Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
    Phone: 617-868-3900
    Web page: http://www.nber.org
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    1. Michael D. Hurd & David A. Wise, 1987. "The Wealth and Poverty of Widows: Assets Before and After the Husband's Death," NBER Working Papers 2325, National Bureau of Economic Research, Inc.
    2. Jennifer L. Warlick, 1982. "Participation of the Aged in SSI," Journal of Human Resources, University of Wisconsin Press, vol. 17(2), pages 236-260.
    3. Yatchew, Adonis & Griliches, Zvi, 1985. "Specification Error in Probit Models," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 134-39, February.
    4. Fraker, Thomas & Moffitt, Robert, 1988. "The effect of food stamps on labor supply : A bivariate selection model," Journal of Public Economics, Elsevier, vol. 35(1), pages 25-56, February.
    5. Moffitt, Robert & Wolfe, Barbara L, 1992. "The Effect of the Medicaid Program on Welfare Participation and Labor Supply," The Review of Economics and Statistics, MIT Press, vol. 74(4), pages 615-26, November.
    6. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-35, December.
    7. Thomas Fraker Robert Moffitt, 1988. "The Effect of Food Stamps on Labor Supply: A Bivariate Selection Model," Mathematica Policy Research Reports efa52cc812a34ce2ac0427b91, Mathematica Policy Research.
    8. Newey, Whitney K., 1984. "A method of moments interpretation of sequential estimators," Economics Letters, Elsevier, vol. 14(2-3), pages 201-206.
    9. Strauss, Robert P., 1977. "Information and participation in a public transfer program," Journal of Public Economics, Elsevier, vol. 8(3), pages 385-396, December.
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