The Health and Earnings of Rejected Disability Insurance Applicants

Abstract

Applicants for Social Security Disability Benefits who fail to pass the medical screening form a natural 'control' group for beneficiaries. Data drawn from the 1972 and 1978 surveys of the disabled done for the Social Security Administration show that fewer than 50% of rejected male applicants work. Typical earnings of those that do are less than 50% of median earnings for other men their age. These data cast doubt on recent econometric work which suggests that the disincentive effects of DI have been substantial.