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The Effect of Disability Payments on Household Earnings and Income: Evidence from the SSI Children's Program

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  • Manasi Deshpande

    (University of Chicago)

Abstract

I estimate the effect of removing children with disabilities from Supplemental Security Income (SSI) on parental earnings and household disability receipt. Using administrative data from the Social Security Administration (SSA), I implement regression discontinuity and differencein- differences designs based on changes in SSA's budget for child medical reviews. I find that parents fully offset the SSI loss with increased earnings, and the loss of the child's SSI payment reduces disability applications by parents and siblings but does not reduce their actual disability receipt. I examine alternative hypotheses for the large parental earnings response.

Suggested Citation

  • Manasi Deshpande, 2016. "The Effect of Disability Payments on Household Earnings and Income: Evidence from the SSI Children's Program," The Review of Economics and Statistics, MIT Press, vol. 98(4), pages 638-654, October.
    • Handle: RePEc:tpr:restat:v:98:y:2016:i:4:p:638-654
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    Citations

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    Cited by:

    1. Arthur Seibold & Sebastian Seitz & Sebastian Siegloch, 2022. "Privatizing Disability Insurance," CESifo Working Paper Series 9979, CESifo.
    2. Alexander Gelber & Timothy J. Moore & Alexander Strand, 2017. "The Effect of Disability Insurance Payments on Beneficiaries' Earnings," American Economic Journal: Economic Policy, American Economic Association, vol. 9(3), pages 229-261, August.
    3. Purvi Sevak & Steven Bruns, "undated". "What Have We Learned About SSI Receipt Among Children?," Mathematica Policy Research Reports 34b2794f49ce4f8ca28c3e314, Mathematica Policy Research.
    4. Giulia Giupponi, 2019. "When income effects are large: labor supply responses and the value of welfare transfers," CEP Discussion Papers dp1651, Centre for Economic Performance, LSE.
    5. Manasi Deshpande, 2016. "Does Welfare Inhibit Success? The Long-Term Effects of Removing Low-Income Youth from the Disability Rolls," American Economic Review, American Economic Association, vol. 106(11), pages 3300-3330, November.
    6. Hamish Low & Luigi Pistaferri, 2020. "Disability Insurance: Theoretical Trade‐Offs and Empirical Evidence," Fiscal Studies, John Wiley & Sons, vol. 41(1), pages 129-164, March.
    7. Melanie Guldi & Lucie Schmidt, 2017. "Taxes, Transfers, and Women’s Labor Supply in the United States," Working Papers 2017-01, University of Central Florida, Department of Economics.
    8. Damon Jones & Ioana Marinescu, 2022. "The Labor Market Impacts of Universal and Permanent Cash Transfers: Evidence from the Alaska Permanent Fund," American Economic Journal: Economic Policy, American Economic Association, vol. 14(2), pages 315-340, May.
    9. Melanie Guldi & Amelia Hawkins & Jeffrey Hemmeter & Lucie Schmidt, 2018. "Supplemental Security Income and Child Outcomes: Evidence from Birth Weight Eligibility Cutoffs," NBER Working Papers 24913, National Bureau of Economic Research, Inc.
    10. Jonas Meier, 2020. "Multivariate Distribution Regression," Diskussionsschriften dp2023, Universitaet Bern, Departement Volkswirtschaft.
    11. Rabaté, Simon & Tréguier, Julie, 2024. "Labour supply and survivor insurance in the Netherlands," Labour Economics, Elsevier, vol. 88(C).
    12. Colin Gray & Adam Leive & Elena Prager & Kelsey Pukelis & Mary Zaki, 2023. "Employed in a SNAP? The Impact of Work Requirements on Program Participation and Labor Supply," American Economic Journal: Economic Policy, American Economic Association, vol. 15(1), pages 306-341, February.
    13. Mark Duggan & Melissa S. Kearney & Stephanie Rennane, 2015. "The Supplemental Security Income (SSI) Program," NBER Working Papers 21209, National Bureau of Economic Research, Inc.
    14. Mark Duggan & Melissa S. Kearney & Stephanie Rennane, 2015. "The Supplemental Security Income Program," NBER Chapters, in: Economics of Means-Tested Transfer Programs in the United States, Volume 2, pages 1-58, National Bureau of Economic Research, Inc.
    15. Michael Levere, "undated". "The Labor Market Consequences of Receiving Disability Benefits During Childhood," Mathematica Policy Research Reports 4a4b6e2d970c4e669ba5f4126, Mathematica Policy Research.
    16. Giupponi, Giulia, 2019. "When income effects are large: labor supply responses and the value of welfare transfers," LSE Research Online Documents on Economics 103424, London School of Economics and Political Science, LSE Library.
    17. Mario Bernasconi & Tunga Kantarcı & Arthur Soest & Jan-Maarten Sonsbeek, 2024. "The added worker effect: evidence from a disability insurance reform," Review of Economics of the Household, Springer, vol. 22(4), pages 1275-1316, December.
    18. Asakawa, Shinsuke & Sasaki, Masaru, 2022. "Can child benefit reductions increase maternal employment? Evidence from Japan," Journal of the Japanese and International Economies, Elsevier, vol. 66(C).

    More about this item

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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