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  3. American Economic Review
  4. November 2016
  5. Does Welfare Inhibit Success? The Long-Term Effects of Removing Low-Income Youth from the Disability Rolls

Does Welfare Inhibit Success? The Long-Term Effects of Removing Low-Income Youth from the Disability Rolls

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Abstract

I estimate the effects of removing low-income youth with disabilities from Supplemental Security Income (SSI) on their earnings and income in adulthood. Using a regression discontinuity design based on a 1996 policy change in age 18 medical reviews, I find that youth who are removed from SSI at age 18 recover one-third of the lost SSI cash income in earnings. SSI youth who are removed and stay off SSI earn on average $4,400 annually, and they lose $76,000 in present discounted observed income over the 16 years following removal relative to those who do not receive a review.

Citation

Deshpande, Manasi. 2016. "Does Welfare Inhibit Success? The Long-Term Effects of Removing Low-Income Youth from the Disability Rolls." American Economic Review, 106 (11): 3300-3330. DOI: 10.1257/aer.20151129

Additional Materials

JEL Classification

  • H55 Social Security and Public Pensions
  • I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
  • J13 Fertility; Family Planning; Child Care; Children; Youth
  • J14 Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination