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

47 Pages Posted: 7 Sep 2012 Last revised: 10 Sep 2012

See all articles by Nicole Maestas

Nicole Maestas

Harvard Medical School - Department of Health Care Policy

Kathleen J. Mullen

RAND Corporation

Alexander Strand

Social Security Administration

Multiple version iconThere are 2 versions of this paper

Date Written: August 31, 2012

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.

Keywords: Disability Insurance, Social Security, labor supply

Suggested Citation

Maestas, Nicole and Mullen, Kathleen J. and Strand, Alexander, Does Disability Insurance Receipt Discourage Work? Using Examiner Assignment to Estimate Causal Effects of SSDI Receipt (August 31, 2012). Michigan Retirement Research Center Research Paper No. 2010-241. Available at SSRN: https://ssrn.com/abstract=2143210 or http://dx.doi.org/10.2139/ssrn.2143210

Nicole Maestas (Contact Author)

Harvard Medical School - Department of Health Care Policy ( email )

180 Longwood Avenue
Boston, MA 02115
United States

Kathleen J. Mullen

RAND Corporation ( email )

1776 Main Street
P.O. Box 2138
Santa Monica, CA 90407-2138
United States
310-393-0411 x6265 (Phone)
310-260-8156 (Fax)

HOME PAGE: http://works.bepress.com/kathleen_mullen

Alexander Strand

Social Security Administration ( email )

Washington, DC
United States

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