What Explains State Variation in SSDI Application Rates?

Center for Retirement Research at Boston College Working Paper No. 2011-23

37 Pages Posted: 10 Dec 2011

See all articles by Norma Coe

Norma Coe

University of Pennsylvania - Perelman School of Medicine

Kelly Haverstick

Boston College - Center for Retirement Research

Alicia H. Munnell

Boston College - Center for Retirement Research

Anthony Webb

Boston College - Center for Retirement Research

Date Written: December 9, 2011

Abstract

Social Security Disability Insurance (SSDI) applications and receipts vary greatly by state. This paper investigates the extent to which this geographic variation in SSDI applications reflects differences in health, demographics, and employment characteristics, state policies, and politics. We find that demographic, health, and employment characteristics of the state have the greatest effect on state-level variations in SSDI application rates, explaining over 70 percent of the variation. State policy concerning mandated employer-sponsored disability insurance (also known as temporary disability insurance or TDI) has a small negative effect on overall SSDI applications. This finding supports the principle underlying many recent SSDI reform plans: temporary disability insurance coverage could save the SSDI program considerable funds in the long run. Further, when we look to explain variation within a state, we find that state changes in health insurance regulation are negatively correlated with the SSDI application rate. This could be an indication that the Affordable Care Act (ACA) may have spillovers to the SSDI program.

Keywords: social security disability insurance, SSDI, demographic, health, employment

JEL Classification: H55, J26

Suggested Citation

Coe, Norma and Haverstick, Kelly and Munnell, Alicia and Webb, Anthony, What Explains State Variation in SSDI Application Rates? (December 9, 2011). Center for Retirement Research at Boston College Working Paper No. 2011-23, Available at SSRN: https://ssrn.com/abstract=1970314 or http://dx.doi.org/10.2139/ssrn.1970314

Norma Coe (Contact Author)

University of Pennsylvania - Perelman School of Medicine ( email )

423 Guardian Drive
Philadelphia, PA 19104
United States

Kelly Haverstick

Boston College - Center for Retirement Research ( email )

Fulton Hall 550
Chestnut Hill, MA 02467
United States

Alicia Munnell

Boston College - Center for Retirement Research ( email )

Fulton Hall 550
Chestnut Hill, MA 02467
United States
617-552-1762 (Phone)

Anthony Webb

Boston College - Center for Retirement Research ( email )

Fulton Hall 550
Chestnut Hill, MA 02467
United States

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