The Social Security Disability Program and Labor Force Participation

35 Pages Posted: 19 Mar 2001 Last revised: 30 Jul 2010

See all articles by Jonathan S. Leonard

Jonathan S. Leonard

University of California, Berkeley - Finance Group; National Bureau of Economic Research (NBER)

Date Written: August 1979

Abstract

In the last twenty years the labor force participation rates of 45 to 54-year-old men have fallen 10.6 percentage points among non-whites and 4.4 percentage points among whites. I find that nearly half of this puzzling decline can be explained by the growth of the Social Security Disability program. By 1975, 6.22% of the prime-age non-white men and 3.57% of the white men were Social Security Disability beneficiaries. Despite the medical screening of applicants, I find in cross-section estimates an elasticity of .35 for beneficiary status with respect to benefit levels. As eligibility requirements have eased and as benefit levels have increased relative to earnings more men have dropped out of the labor force and become Social Security Disability beneficiaries.

Suggested Citation

Leonard, Jonathan S., The Social Security Disability Program and Labor Force Participation (August 1979). NBER Working Paper No. w0392. Available at SSRN: https://ssrn.com/abstract=228066

Jonathan S. Leonard (Contact Author)

University of California, Berkeley - Finance Group ( email )

Haas School of Business
545 Student Services Building
Berkeley, CA 94720
United States
510-642-7048 (Phone)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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