Trends in Employment and Earnings of Allowed and Rejected Applicants to the Social Security Disability Insurance Program
Till von Wachter, Jae Song, Joyce Manchester
American Economic Review · 2011 · Volume 101 · Issue 7
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)
Keywords
Social Security and Public Pensions, Economics of the Elderly, Economics of the Handicapped, Non-labor Market Discrimination, Safety, Job Satisfaction, Related Public Policy, Wage Level and Structure, Wage Differentials
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