Disability Benefit Take-Up and Local Labor Market Conditions

Kerwin Kofi Charles, Yiming Li and Melvin Stephens
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Kerwin Kofi Charles: University of Chicago and NBER
Yiming Li: University of Chicago

The Review of Economics and Statistics, 2018, vol. 100, issue 3, 416-423

Abstract: Exploiting county-level variation in oil-producing areas from shocks to world oil and gas prices, we study how local labor market conditions affect disability take-up. We extend well-known previous work using a similar research design by analyzing a different price shock; a larger, more representative set of labor markets; and a more recent period marked by skyrocketing disability payments. Our estimated elasticity for SSDI payments with respect to earnings of -0.29 is surprisingly similar to earlier findings. Our preferred SSI elasticity estimate of -0.16 is smaller than previous findings, but we show that SSI programmatic changes explain most of the difference.

Date: 2018
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