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Accounting for Disability Insurance in the Dynamic Relationship Between Disability Onset and Earnings

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  • Perry Singleton

Abstract

The onset of a work-limiting disability coincides with an immediate decline in earnings with little recovery. This study examines whether this relationship is attributable to the labor disincentives of disability insurance. The data come from the Survey of Income and Program Participation linked to administrative data from the Social Security Administration. The analysis suggests that disability insurance accounts for little of the initial drop in earnings at the time of disability onset, but its effect may increase as time since disability onset elapses. The results highlight the advantages of immediate, though temporary disability benefits.

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  • Perry Singleton, 2010. "Accounting for Disability Insurance in the Dynamic Relationship Between Disability Onset and Earnings," Working Papers, Center for Retirement Research at Boston College wp2010-18, Center for Retirement Research, revised Nov 2010.
    • Handle: RePEc:crr:crrwps:wp2010-18
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    File URL: http://crr.bc.edu/working-papers/accounting-for-disability-insurance-in-the-dynamic-relationship-between-disability-onset-and-earnings-ii/
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