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American Economic Review: Vol. 101 No. 7 (December 2011)

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Trends in Employment and Earnings of Allowed and Rejected Applicants to the Social Security Disability Insurance Program

Article Citation

von Wachter, Till, Jae Song, and Joyce Manchester. 2011. "Trends in Employment and Earnings of Allowed and Rejected Applicants to the Social Security Disability Insurance Program." American Economic Review, 101(7): 3308-29.

DOI: 10.1257/aer.101.7.3308

Abstract

Longitudinal administrative data show that rejected male applicants to the Disability Insurance (DI) program who are younger or have low-mortality impairments such as back pain and mental health problems exhibit substantial labor force attachment. While we confirm that employment rates of older rejected applicants are low, continued high numbers of younger and low-mortality beneficiaries have raised the potential employment of DI beneficiaries. Three findings support economic inducement to apply. Mean preapplication earnings have fallen, rejected applicants experience preapplication declines in earnings, and beneficiaries whose first applications were rejected at the DDS level but who ultimately received benefits exhibit substantial employment. (JEL: H55, J14, J28, J31)

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Authors

von Wachter, Till (Columbia U)
Song, Jae (US Social Security Administration)
Manchester, Joyce (US Congressional Budget Office)

JEL Classifications

H55: Social Security and Public Pensions
J14: Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination
J28: Safety; Job Satisfaction; Related Public Policy
J31: Wage Level and Structure; Wage Differentials


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