Measuring the spillover to disability insurance due to the rise in the full retirement age

Measuring the spillover to disability insurance due to the rise in the full retirement age

Collection:
Health Policy and Services Research
Series Title(s):
Center for Retirement Research working paper
Contributor(s):
Coe, Norma B.
Haverstick, Kelly.
Boston College. Center for Retirement Research.
Publication:
Chestnut Hill, MA : Center for Retirement Research at Boston College, c2010
Language(s):
English
Format:
Text
Subject(s):
Persons with Disabilities -- statistics & numerical data
Eligibility Determination -- statistics & numerical data
Insurance Benefits -- statistics & numerical data
Insurance, Disability -- statistics & numerical data
Retirement -- statistics & numerical data
Social Security -- statistics & numerical data
United States
United States. Social Security Administration
Genre(s):
Technical Report
Abstract:
The increase in the full retirement age in the Social Security program provides exogenous variation in the generosity in the Social Security Disability Insurance (SSDI) program, based only on birth year. We exploit this variation to estimate how responsive SSDI applications are to the financial incentive to apply. We find that a 1-percentage-point decrease in the retirement-to-disability benefit ratio leads to a 0.25-percentage-point increase in the SSDI application rate for the sample, which represents an 8-percent increase in applications per two years. When weighted to account for sampling design, we estimate that this change in the financial incentive accounted for about 5 percent of the SSDI applications in 2009. However, we do not find a corresponding increase in SSDI receipt based on the financial incentives. In addition, we find little difference in the covariates for individuals who eventually receive SSDI, suggesting that the increase in applications may increase the administrative costs of the SSDI program, but should not have a dramatic impact on the long-term financial solvency of the program.
Copyright:
Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY license. (More information)
Illustrations:
Illustrations
NLM Unique ID:
101553202 (See catalog record)
Permanent Link:
http://resource.nlm.nih.gov/101553202