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American Economic Review: Vol. 92 No. 1 (March 2002)

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The Impact of Economic Conditions on Participation in Disability Programs: Evidence from the Coal Boom and Bust

Article Citation

Black, Dan, Kermit Daniel, and Seth Sanders. 2002. "The Impact of Economic Conditions on Participation in Disability Programs: Evidence from the Coal Boom and Bust ." American Economic Review, 92(1): 27-50.

DOI: 10.1257/000282802760015595

Abstract

We examine the impact of the coal boom of the 1970's and the coal bust of the 1980's on disability program participation. These shocks provide clear evidence that as the value of labor-market participation increases, disability program participation falls. For the Disability Insurance program, the elasticity of payments with respect to local earnings is between –0.3 and –0.4 and for Supplemental Security Income the elasticity is between –0.4 and –0.7. Consistent with a model where qualifying for disability programs is costly, the relationship between economic conditions and program participation is much stronger for permanent than for transitory economic shocks. (JEL, J0, H0)

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Authors

Black, Dan (Center for Policy Research, 426 Eggers Hall, Syracuse University, Syracuse, NY 13244, US)
Daniel, Kermit (The Monitor Company, 650 Madison Avenue, 9th Floor, New York, NY 10022, US)
Sanders, Seth (Department of Economics, 3105 Tydings Hall, University of Maryland, College Park, MD 20742, US)


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