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What Explains State Variation in SSDI Application Rates?

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  • Norma B. Coe
  • Kelly Haverstick
  • Alicia H. Munnell
  • Anthony Webb

Abstract

Social Security Disability Insurance (SSDI) applications and receipts vary greatly by state. This paper investigates the extent to which this geographic variation in SSDI applications reflects differences in health, demographics, and employment characteristics, state policies, and politics. We find that demographic, health, and employment characteristics of the state have the greatest effect on state-level variations in SSDI application rates, explaining over 70 percent of the variation. State policy concerning mandated employer-sponsored disability insurance (also known as temporary disability insurance or TDI) has a small negative effect on overall SSDI applications. This finding supports the principle underlying many recent SSDI reform plans: temporary disability insurance coverage could save the SSDI program considerable funds in the long run. Further, when we look to explain variation within a state, we find that state changes in health insurance regulation are negatively correlated with the SSDI application rate. This could be an indication that the Affordable Care Act (ACA) may have spillovers to the SSDI program.

Suggested Citation

  • Norma B. Coe & Kelly Haverstick & Alicia H. Munnell & Anthony Webb, 2011. "What Explains State Variation in SSDI Application Rates?," Working Papers, Center for Retirement Research at Boston College wp2011-23, Center for Retirement Research, revised Nov 2011.
    • Handle: RePEc:crr:crrwps:wp2011-23
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    File URL: http://crr.bc.edu/working-papers/what-explains-state-variation-in-ssdi-application-rates/
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    Cited by:

    1. Nicholas, Lauren Hersch & Done, Nicolae & Baum, Micah, 2020. "Lifetime job demands and later life disability," The Journal of the Economics of Ageing, Elsevier, vol. 17(C).
    2. Matthew S. Rutledge, 2011. "The Impact of Unemployment Insurance Extensions on Disability Insurance Application and Allowance Rates," Working Papers, Center for Retirement Research at Boston College wp2011-17, Center for Retirement Research, revised Oct 2011.
    3. Andreas I. Mueller & Jesse Rothstein & Till M. von Wachter, 2016. "Unemployment Insurance and Disability Insurance in the Great Recession," Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages 445-475.
    4. Michaud, Amanda & Nelson, Jaeger & Wiczer, David, 2018. "Vocational considerations and trends in Social Security Disability," The Journal of the Economics of Ageing, Elsevier, vol. 11(C), pages 41-51.
    5. Radha Iyengar & Giovanni Mastrobuoni, 2014. "The political economy of the disability insurance: theory and evidence of gubernatorial learning," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-31, December.
    6. Lucie Schmidt, 2013. "The New Safety Net? Supplemental Security Income after Welfare Reform," Department of Economics Working Papers 2013-07, Department of Economics, Williams College.

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