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Induced Entry Effects of a $1 for $2 Offset in SSDI Benefits

Listed author(s):
  • Hugo Benitez-Silva

    ()

    (Dept. of Economics, SUNY at Stony Brook)

  • Moshe Buchinsky

    (UCLA and NBER)

  • John Rust

    (University of Maryland)

This paper presents an .audit. of the multistage application and appeal process that the U.S. Social Security Administration (SSA) uses to determine eligibility for disability benefits from the Disability Insurance (DI) and Supplemental Security Income (SSI) programs. We use a subset of individuals from the Health and Retirement Study who applied for DI or SSI benefits between 1992 and 1996, to estimate classification error rates under the hypothesis that applicants' self-reported disability status and the SSA's ultimate award decision are noisy but unbiased indicators of a latent .true disability status. indicator. We find that approximately 20% of SSI/DI applicants who are ultimately awarded benefits are not disabled, and that 60% of applicants who were denied benefits are disabled. We also construct an optimal statistical screening rule that results in significantly lower classification error rates than does SSA's current award process.

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File URL: https://www.rand.org/content/dam/rand/www/external/labor/aging/rsi/rsi_papers/2004_buchinsky.pdf
File Function: First version, 2005
Download Restriction: no

Paper provided by Stony Brook University, Department of Economics in its series Department of Economics Working Papers with number 05-03.

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Date of creation: Mar 2005
Handle: RePEc:nys:sunysb:05-03
Contact details of provider: Postal:
Stony Brook, NY 11794-4384

Phone: (631)632-7540
Fax: (631)632-7516
Web page: http://www.stonybrook.edu/commcms/economics/
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  1. Petra Todd & Kenneth I. Wolpin, 2002. "Using a Social Experiment to Validate a Dynamic Behavioral Model of Child Schooling and Fertility: Assessing the Impact of a School Subsidy Program in Mexico," PIER Working Paper Archive 03-022, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 01 Sep 2003.
  2. David Neumark & Elizabeth T. Powers, 2005. "The Effects of Changes in State SSI Supplements on Preretirement Labor Supply," Public Finance Review, , vol. 33(1), pages 3-35, January.
  3. Robert Moffitt, 2002. "The role of randomized field trials in social science research: a perspective from evaluations of reforms of social welfare programs," CeMMAP working papers CWP23/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  4. James J. Heckman & V. Joseph Hotz & Marcelo Dabos, 1987. "Do We Need Experimental Data To Evaluate the Impact of Manpower Training On Earnings?," Evaluation Review, , vol. 11(4), pages 395-427, August.
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