• Chart of the Week
  • December 4, 2019

Screened out

A local branch of the Social Security Administration office of Disability Adjudication and Review.

Jonathan Weiss

The Social Security Administration paid out roughly $194 billion in disability benefits in 2015, an amount that has ballooned significantly in the past couple of decades as a greater share of working-age adults seek help.

Given the size of the program, policymakers obviously want to be sure that the money is going to the individuals who need it most. But it’s not easy to get enrolled. Applicants must submit extensive paperwork and provide access to medical records. And if traveling to a crowded field office to wait in a long line is too big of a hassle, then they might decide it’s not worthwhile and stay home.

A paper in the November issue of the American Economic Journal: Economic Policy measures the extent to which these “application costs” affect who applies and gets benefits from the program.

Authors Manasi Deshpande and Yue Li examine the impacts of field office closings on the volume of applications and recipients of aid. Using administrative data, they compared the number and composition of applicants and recipients in areas where their nearest office closed to those that didn’t have an office closure until several years later.

 

 

 

Figure 3 from Deshpande and Li (2019)

The figure above shows that closings led to a 16 percent decline in the number of recipients (dashed line), especially among less educated people with moderately severe conditions. Applications (solid line) fell by 10 percent, or 3.3 applications in each affected zip code per quarter. The steeper drop in recipients implies that closings disproportionately discouraged applications by people who would have qualified for assistance if they had only applied.

The research underscores the importance of providing convenient access to program representatives, whose services are particularly valuable to some of the most vulnerable people.