Do Stronger Employment Discrimination Protections Decrease Reliance on Social Security Disability Insurance? Evidence from the U.S. Social Security Reforms

Patrick Button () and Mashfiqur R. Kahn
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Mashfiqur R. Kahn: Bates White Consulting

No 20-326, Upjohn Working Papers from W.E. Upjohn Institute for Employment Research

Abstract: The United States Social Security Amendments of 1983 (SSA1983) increased the full retirement age (FRA) and increased penalties for retiring before the FRA. This cut to retirement benefits caused spillover effects on Social Security Disability Insurance (SSDI) applications and receipt by making SSDI relatively more generous. We explore if stronger disability and age discrimination laws moderated these spillovers, using variation whereby many state laws are broader or stronger than federal law. We estimate the effects of these laws on SSDI applications and receipt using a difference-in-differences approach, comparing cohorts affected by SSA1983 to similarly aged unaffected cohorts, across states. We find that a broader definition of disability, where only a medically diagnosed condition is required to be covered under state law, significantly reduces SSDI applications induced by SSA1983, but has no effect on SSDI receipt, likely because the foregone applications were for those with less severe conditions that were unlikely to have been approved for SSDI. We find some evidence that other broader or stronger features of state disability discrimination laws reduce both SSDI applications and receipt. We do not find much evidence that age discrimination laws reduce spillovers to SSDI. These results suggest that broader and stronger disability discrimination laws reduce employment barriers, allowing older individuals to work longer, possibly reducing reliance on SSDI and costly applications to SSDI.

Keywords: Disability, aging, discrimination, employment law; disability insurance; Social Security, Americans with Disability Act, Age Discrimination in Employment Act, Social Security Amendments of 1983 (search for similar items in EconPapers)
JEL-codes: H55 J14 J26 J71 J78 K31 (search for similar items in EconPapers)
Date: 2020-05
New Economics Papers: this item is included in nep-age, nep-ias and nep-law
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Related works:
Journal Article: Do stronger employment discrimination protections decrease reliance on Social Security Disability Insurance? Evidence from the U.S. Social Security reforms (2022)
Working Paper: Do Stronger Employment Discrimination Protections Decrease Reliance on Social Security Disability Insurance? Evidence from the U.S. Social Security Reforms (2021)
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