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The Labor Supply Effects of Disability Insurance: Evidence from Automatic Conversion Using Administrative Data

dc.contributor.authorMaestas, Nicole
dc.contributor.authorSong, Jae
dc.date.accessioned2011-04-29T12:10:04Z
dc.date.available2011-04-29T12:10:04Z
dc.date.issued2011-04
dc.identifier.urihttps://hdl.handle.net/2027.42/83701
dc.description.abstractWe analyze a natural experiment generated by the interaction of the Social Security DI and OA programs at Full Retirement Age, when DI beneficiaries are automatically converted from the DI program to the OA retired worker program. At conversion benefit payments continue unchanged, however the DI program’s high implicit marginal tax rate on earnings is abruptly relaxed. We use administrative Social Security data for the universe of primary worker DI beneficiaries from the 1934-1942 birth cohorts observed in panel over the period of 1995-2008. Our estimates imply that the DI program depresses labor supply among even the oldest DI beneficiaries. In the context of the literature to date that has sought to establish an upper bound on the earnings losses caused by the presence of the DI program by using quasi-experimental variation occurring at the program entry margin, our use of quasi-experimental variation arising from the program exit margin, when individuals are already in their mid-60s and the dominant trend in labor force participation in the population at large is downward, suggests that our estimates are most appropriately viewed as a lower bound estimate of the residual work capacity of all beneficiaries.en_US
dc.description.sponsorshipSocial Security Administrationen_US
dc.language.isoen_USen_US
dc.publisherMichigan Retirement Research Center, University of Michigan, P.O. Box 1248, Ann Arbor, MI 48104en_US
dc.subjectLabor Supplyen_US
dc.subjectDisabilityen_US
dc.titleThe Labor Supply Effects of Disability Insurance: Evidence from Automatic Conversion Using Administrative Dataen_US
dc.typeWorking Paperen_US
dc.subject.hlbsecondlevelPopulation and Demography
dc.subject.hlbtoplevelSocial Sciences
dc.contributor.affiliationotherRANDen_US
dc.contributor.affiliationotherSocial Security Administrationen_US
dc.contributor.affiliationumcampusAnn Arboren_US
dc.description.bitstreamurlhttp://deepblue.lib.umich.edu/bitstream/2027.42/83701/1/wp247.pdf
dc.owningcollnameRetirement and Disability Research Center, Michigan (MRDRC)


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