A Model of Social Security Disability Insurance Using Matched SIPP/Administrative Data

74 Pages Posted: 25 May 2008

See all articles by Kajal Lahiri

Kajal Lahiri

State University of New York (SUNY) at Albany, College of Arts and Sciences, Economics

Jae Song

U.S. Social Security Administration

Bernard Wixon

U.S. Social Security Administration

Date Written: April 22, 2008

Abstract

We study Disability Insurance (DI) application behavior in the U.S. using a matched SIPP and administrative data over 1989-1995. Certain state-contingent earnings projections and eligibility probabilities are central to the analysis. We find evidence for a small work disincentive effect of DI that seems to be restricted to a subset of the DI beneficiaries, including low earning groups such as blue collar workers and those subject to economic dislocation. Processing time, Medicare value, unemployment, private health insurance, and health shocks are some of the major factors that affect application propensity. The behavioral response of female workers to various parameters of the DI program is found to be quite different from that of males.

Keywords: Disability behavior, SIPP, Social Security

JEL Classification: H55, I12, C35

Suggested Citation

Lahiri, Kajal and Song, Jae and Wixon, Bernard, A Model of Social Security Disability Insurance Using Matched SIPP/Administrative Data (April 22, 2008). Available at SSRN: https://ssrn.com/abstract=1136483 or http://dx.doi.org/10.2139/ssrn.1136483

Kajal Lahiri (Contact Author)

State University of New York (SUNY) at Albany, College of Arts and Sciences, Economics ( email )

Department of Economics
1400 Washington Avenue
Albany, NY 12222
United States
518-442 4758 (Phone)
518-442 4736 (Fax)

HOME PAGE: http://www.albany.edu/~klahiri

Jae Song

U.S. Social Security Administration ( email )

Washington, DC 20254
United States
202-358-6403 (Phone)
202-358-6192 (Fax)

Bernard Wixon

U.S. Social Security Administration ( email )

Washington, DC 20254
United States
202-358-6249 (Phone)

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