The effectiveness of financial work incentives in DI and SSI: Lessons from other transfer programs

Hilary Hoynes and Robert Moffitt

Institute for Research on Poverty Discussion Papers from University of Wisconsin Institute for Research on Poverty

Abstract: The Disability Insurance Program (DI) and the Supplemental Security Income Program (SSI) are the primary cash transfer programs for the disabled. We compare the potential outcomes of using financial inducements as a means to increase the work incentives to those who are on DI, and an earnings replacement program, or SSI, a means-tested transfer program not tied to previous work experience. Our assessment of the existing research on work incentives in programs for the nondisabled leads us to urge caution in relying on simple financial inducements as means of work-incentive reform without further, concrete evidence of their effectiveness.

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