Does Disability Insurance Receipt Discourage Work? Using Examiner Assignment to Estimate Causal Effects of SSDI Receipt

Nicole Maestas, Kathleen Mullen and Alexander Strand
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Nicole Maestas: RAND Corporation
Alexander Strand: SSA

Working Papers from University of Michigan, Michigan Retirement Research Center

Abstract: We present the first causal estimates of the effect of Social Security Disability Insurance benefit receipt on labor supply using all program applicants. We use new administrative data to match applications to disability examiners, and exploit variation in examiners’ allowance rates as an instrument for benefit receipt. We find that among the estimated 23% of applicants on the margin of program entry, employment would have been 28 percentage points higher had they not received benefits. The effect is heterogeneous, ranging from no effect for those with more severe impairments to 50 percentage points for entrants with relatively less severe impairments.

Pages: 47 pages
Date: 2012-08
New Economics Papers: this item is included in nep-hea, nep-ias and nep-lab
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Journal Article: Does Disability Insurance Receipt Discourage Work? Using Examiner Assignment to Estimate Causal Effects of SSDI Receipt (2013)
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