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American Economic Review Vol. 101 No. 7 2011

Trends in Employment and Earnings of Allowed and Rejected Applicants to the Social Security Disability Insurance Program

Till von Wachter1; Jae Song2; Joyce Manchester3

1 Columbia University, 1022 International Affairs Building, 420 West 118th Street, New York, NY 10027. · 2 Social Security Administration, One Skyline Tower, 5107 Leesburg Pike, Falls Church, VA 22041. · 3 Congressional Budget Office, Ford House Office Building, Washington, DC 20515.

Abstract

Longitudinal administrative data show that rejected male applicants to the Disability Insurance (DI) program who are younger or have low-mortality impairments such as back pain and mental health problems exhibit substantial labor force attachment. While we confirm that employment rates of older rejected applicants are low, continued high numbers of younger and low-mortality beneficiaries have raised the potential employment of DI beneficiaries. Three findings support economic inducement to apply. Mean preapplication earnings have fallen, rejected applicants experience preapplication declines in earnings, and beneficiaries whose first applications were rejected at the DDS level but who ultimately received benefits exhibit substantial employment. JEL: H55, J14, J28, J31

DOI
10.1257/aer.101.7.3308
Volume
101
Issue
7
Pages
3308-3329
Language
en
Sources
openalex crossref bibtex:phds-export.bib

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