The Importance of State Anti-Discrimination Laws on Employer Accommodation and the Movement of Their Employees Onto Social Security Disability Insurance

24 Pages Posted: 19 Nov 2011 Last revised: 2 Apr 2015

See all articles by Richard V. Burkhauser

Richard V. Burkhauser

Cornell University - Department of Policy Analysis & Management (PAM); University of Melbourne, Melbourne Institute

Lauren Hersch Nicholas

University of Michigan at Ann Arbor - Institute for Social Research (ISR)

Maximilian D. Schmeiser

Amazon Lending

Date Written: January 3, 2011

Abstract

The rate of application for Social Security Disability Insurance (SSDI) benefits, as well as the number of beneficiaries has been increasing for the past several decades, threatening the solvency of the SSDI program. One possible remedy is to promote continued employment amongst those experiencing the onset of a work limiting disability through the provision of workplace accommodations. Using the Health and Retirement Study data linked to Social Security administrative we find that the provision of workplace accommodation reduces the probability of application for SSDI following disability onset. We estimate that receipt of an accommodation reduces a worker’s probability of applying for SSDI by 7.4 percentage points over five years and 5.7 percentage points over 10 years. We then attempt to control for the potential endogeneity of accommodation receipt by exploiting exogenous variation in the implementation of state and federal anti-discrimination laws to estimate the impact of workplace accommodation on SSDI application in an instrumental variables (IV) model. In contrast to our expectations, we find that the IV estimates are actually larger in magnitude than the standard estimates, implying a reduction in the probability of applying within five years of 26 percentage points, and applying within 10 years of 39 percentage points. Overall our results imply that increasing accommodation is a plausible strategy for reducing SSDI applications and the number of beneficiaries.

Keywords: disability, SSDI, HRS, Social Security Disability Insurance, Health and Retirement Study

JEL Classification: J64

Suggested Citation

Burkhauser, Richard V. and Nicholas, Lauren Hersch and Schmeiser, Maximilian D., The Importance of State Anti-Discrimination Laws on Employer Accommodation and the Movement of Their Employees Onto Social Security Disability Insurance (January 3, 2011). Michigan Retirement Research Center Research Paper No. 2011-251, Available at SSRN: https://ssrn.com/abstract=1961705 or http://dx.doi.org/10.2139/ssrn.1961705

Richard V. Burkhauser

Cornell University - Department of Policy Analysis & Management (PAM) ( email )

120 Martha Van Rensselaer Hall
Ithaca, NY 14853
United States

University of Melbourne, Melbourne Institute ( email )

Level 5, FBE Building, 111 Barry Street
161 Barry Street
Carlton, VIC 3053
Australia

Lauren Hersch Nicholas

University of Michigan at Ann Arbor - Institute for Social Research (ISR) ( email )

Ann Arbor, MI 48106-1248
United States

HOME PAGE: http://www.psc.isr.umich.edu/people/profile/792/Lauren_Nicholas

Maximilian D. Schmeiser (Contact Author)

Amazon Lending ( email )

Seattle, WA 98144
United States

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