Earnings histories of SSI beneficiaries working in December 1997.

Disabling conditions previously considered to be permanent and total are no longer viewed as automatic barriers to work. Medical advances, improved accommodations in the workplace, and changes in the nature of work for the working disabled have allowed many disabled people to rejoin the workforce. The Social Security Administration (SSA) has followed those developments with a view toward encouraging people receiving disability benefits to consider returning to work. To effectively target SSA's efforts and evaluate their success, information about previous work histories of the Supplemental Security Income (SSI) beneficiary population is used to provide baseline data. This article examines the earnings histories of 300,000 disabled SSI beneficiaries--one of the populations targeted by the expanded work-incentive measure under Public Law 106-70--who were working in December 1997. The article also investigates whether beneficiaries who are working have significant lifetime earnings and whether earnings patterns exist that might assist with SSA's work-support activities. SSI program records were matched to data in the Master Earnings File to explore the characteristics and earnings patterns before and after a person applies for benefits. The article addresses several questions: What are the general characteristics of disabled SSI beneficiaries? What are their earnings histories? Did they have an earnings record when they applied for SSI? Of the SSI beneficiaries working in December 1997, most tended to be younger than other disabled beneficiaries, to have some sort of mental disability, and to have earnings well below levels that would suggest their eventual, complete independence from the SSI cash benefits program. A look at past covered earnings revealed that the vast majority of SSI workers had a history of earnings before they applied for SSI benefits. Despite their severe impairments and age at the time of first eligibility, nearly 40 percent had earnings in 11 years or more. The amounts of those earnings were quite low, however, and were usually not high enough to preclude SSI eligibility. Examining the years immediately before and after the point of application indicated whether recent pre-application earnings were consistent with post-application return to work. Results were a bit surprising. They revealed that one-third of the 1997 SSI workers had no earnings, and another 28 percent returned to work despite having no earnings in the 4-year period before application. Persons receiving SSI because of mental retardation seemed to have poorer earnings histories than other workers but were more likely to return to work after application. That may be explained by their younger ages or may reflect the outside assistance they received in responding to SSA work incentives.     

Disability benefits suspended or terminated because of work

We use a new variable in the Social Security Administration's Ticket Research File to produce statistics on the first month of suspension or termination for work (STW) for Social Security Disability Insurance (DI) and Supplemental Security Income (SSI)-only beneficiaries as well as on the number of months in nonpayment status following suspension or termination for work (NSTW) before their return to the rolls, attainment of the full retirement age, or death--in each year from 2002 through 2006. Less than 1 percent of beneficiaries experienced their first STW in each year, but more were in NSTW in at least 1 month. Ticket to Work (TTW) participants were more likely to have a first STW than nonparticipants, but most of those who had an STW were not TTW participants, reflecting low use of TTW. Employment networks often failed to file claims for outcome payments during months when their TTW clients were in NSTW.     

Disabled SSI recipients who work.

A substantial working history is not a characteristic normally associated with recipients of Supplemental Security Income (SSI) payments. Yet nearly 80 percent of all SSI disabled recipients have worked before applying for SSI and 20 percent work after they start receiving SSI payments. This study takes a look at various facets of the work histories of disabled SSI recipients, including the amount and types of work done, and the types of recipients who seem most likely to work. Information on these histories was obtained from a 1-percent sample file cross-matched to SSI administrative records and other agency files containing data on employment histories and industry codes. Also discussed are the implications that these work histories have for efforts by the Social Security Administration to encourage SSI disabled recipients to begin or resume work.     

Early retirees under Social Security: health status and economic resources

Some proposals to change the Social Security program to ensure long-run solvency would reduce or eliminate benefits for early retirees. This article documents the health and financial resources of Old-Age and Survivors Insurance (OASI) beneficiaries aged 62-64. It identifies a substantial minority of early retirees who might be economically vulnerable if either the early eligibility age or normal retirement age was raised. Attention is directed at the extent to which poor health limits work in this age group and the extent to which curtailment of early OASI benefits might lead to increases in the Disability Insurance (DI) program rolls. Using a set of comprehensive health measures, we estimate that over 20 percent of OASI beneficiaries aged 62-64 have health problems that substantially impair their ability to work. This finding implies that in this age range, as many severely disabled persons receive OASI benefits as disability benefits. In fact, 12 percent of early beneficiaries would meet a more stringent criterion for being classified "disabled"--SSA's medical standard for disability benefits. The evidence therefore indicates that OASI functions as a substantial, albeit unofficial, disability program for early retirees. Compared with those who have no health problems or are less severely impaired, early OASI beneficiaries who meet the medical criteria for disability benefits are more likely to be living alone and more likely to be poor or "near poor." The great majority of the group--almost 80 percent--are women. Analysis of their earnings histories suggests that most of these beneficiaries do not satisfy the insured-status requirements for Disability Insurance benefits. The article considers the different roles of the OASI program and the DI program for health-impaired individuals aged 62-64. Disability modelers sometimes overlook an important aspect of program administration. Under customary screening procedures implemented in Social Security field offices, applicants for early OASI benefits who appear to be severely impaired simultaneously apply for DI benefits if they are disability insured. If they are found eligible for DI benefits, those applicants become DI beneficiaries. The implication is that raising the earliest entitlement age would have little impact on the DI rolls. Unless there are changes in eligibility criteria, the DI program would not serve as a safety net for many of the most severely disabled early retirees.     

The reservation wages of Social Security Disability Insurance beneficiaries

There exists a lot of research on the reservation wages of the unemployed as a determinant of unemployment duration. Little is known about the reservation wages of those who are not in the labor force but might be potential labor force returnees, such as Social Security Disability Insurance (DI) beneficiaries. The main objective of this article is to assess what can be learned from the subjective reservation wages of DI beneficiaries. Using the New Beneficiary Data System (NBDS), the article assesses the magnitudes of reservation wages compared to the last wage earned and the benefit amount, as well as the determinants of reservation wages in a regression framework. The NBDS is unique in that it provides the reservation wages and the work history of DI beneficiaries before and after joining the DI rolls. The article has several noteworthy results and policy implications: *Data show that a significant portion of beneficiaries report being likely to accept a job if offered one. Based on the NBDS, 13 percent of DI beneficiaries who did not work since joining the rolls in 1981-1982 reported in 1991 that they would be willing to work if offered a job and provided their reservation wages. *DI beneficiaries do not appear to price themselves out of the labor market. Half of them would want a wage that is 80 percent or less of the last wage earned before receiving DI. It is estimated that approximately 7 percent of long-term DI beneficiaries may potentially return-to-work if they search for jobs and have a wage offer distribution with a mean at 80 percent of their last wage. *The nonlabor income in addition to the benefit is positively and significantly associated with the reservation wage, while the benefit amount per se is not. However, this result needs to be treated with caution given that nonlabor income is endogenous to the model. *Heterogeneity exists between persons still under the DI program and those that have moved to the Old-Age program. The subsamples of persons who have shifted to the Old-Age program and those who are still under the DI program have median reservation wage to the last wage ratios of 0.69 and 0.93, respectively. A significantly lower reservation wage for persons who have moved to the Old-Age program was also found in a regression framework. This heterogeneity between the two groups may result in part from the different program characteristics both groups face, for instance, in terms of benefit termination and Medicare eligibility rules. *Subjective reservation wage data can be useful to study populations that are out of the labor force. This article is innovative in that it focuses on a group of persons who are typically considered as being out of the labor force, and therefore are not asked reservation wages in general household surveys such as the Current Population Survey. It would be of great interest to collect more reservation wage data for DI beneficiaries in a longitudinal data set to expand this analysis, for instance, to assess conclusively the effects of changing program characteristics on reservation wages and return-to-work outcomes as beneficiaries transition to the Old-Age program or as new return-to-work programs are put in place.     

Improving return-to-work strategies in the United States disability programs, with analysis of program practices in Germany and Sweden

The General Accounting Office (GAO) has made recommendations for improving the disability programs by citing practices that have been successful in Germany, Sweden, and the private sector. This issue is important in the United States because the number of disability beneficiaries is growing rapidly, program costs are increasing proportionately, and few disability recipients are leaving the disability rolls to resume work activity. GAO points out that the estimated lifetime savings for removing an additional 1 percent of the disabled beneficiaries from the rolls of the Disability Insurance (DI) and the Supplemental Security Income (SSI) programs each year will ultimately reach $3.0 billion. GAO cites three specific practices as showing the most promise for returning the disabled to work. They are (1) intervening as soon as possible after a disabling event to promote and facilitate return to work, (2) identifying and providing necessary return-to-work assistance and managing cases to achieve return-to-work goals, and (3) structuring cash and health benefits to encourage people with disabilities to return to work. This article examines these suggestions to improve the rate of rehabilitation of disabled workers using research by experts on return-to-work practices in Germany, Sweden, and the United States. Experts caution that any consideration of borrowing practices from other countries needs to take into account the unique economic, social, and political elements in each country. Although other countries appear to be very successful in their rehabilitation programs, practices that are successful in one country may not necessarily work well in another. Countries have different definitions of disability and payment structures. The existence of temporary and partial awards in Germany and Sweden may ensure a number of easily rehabilitated individuals, while the U.S. vocational rehabilitation (VR) agencies have been mandated to focus on only the most severely disabled individuals. Public expenditures for vocational rehabilitation, work for the disabled, and disability benefits are much higher as a percentage of gross domestic product in Germany and Sweden than they are in the United States. Compared with the United States, Germany spent twice as much for VR, and Sweden spent 2.6 times more. Impediments to GAO's suggestions include divergent goals of the Social Security program and VR agencies, lack of availability of VR services, the timing of VR referral (which is significantly later than the onset of the disability), and little incentive for return to work built into the payment structure. The Work Incentives Improvement Act of 1999 is currently being considered by a Congressional conference committee. The bill would establish a Ticket to Work and Self-Sufficiency program and would require or authorize the Social Security Administration to demonstrate and evaluate different ways of encouraging return to work. In designing these demonstrations, early intervention after a potentially disabling illness or injury is an approach that merits serious attention.     

How common is "parking" among Social Security Disability Insurance beneficiaries? Evidence from the 1999 change in the earnings level of substantial gainful activity

Fewer Social Security Disability Insurance (DI) beneficiaries have their earnings suspended or terminated because of work than those who are actually working, partly because beneficiaries "park" earnings at a level below substantial gainful activity (SGA) to retain benefits. We assess the extent of parking by exploiting the 1999 change in the SGA earnings level from $500 to $700 monthly for nonblind beneficiaries using a difference-indifference analysis that compares two annual cohorts of beneficiaries who completed their trial work period, one that was affected by the SGA change and one that was not. Our impact estimates, along with results from other sources, suggest that from 0.2 to 0.4 percent of all DI beneficiaries were parked below the SGA level in the typical month from 2002 through 2006. The SGA change did not yield any difference in mean earnings, although it did result in a small reduction in months spent off of the rolls because of work.     

The net effects of the Project NetWork return-to-work case management experiment on participant earnings, benefit receipt, and other outcomes

The Social Security Administration (SSA) initiated Project NetWork in 1991 to test case management as a means of promoting employment among persons with disabilities. The demonstration, which targeted Social Security Disability Insurance (DI) beneficiaries and Supplemental Security Income (SSI) applicants and recipients, offered intensive outreach, work-incentive waivers, and case management/referral services. Participation in Project NetWork was voluntary. Volunteers were randomly assigned to the "treatment" group or the "control" group. Those assigned to the treatment group met individually with a case or referral manager who arranged for rehabilitation and employment services, helped clients develop an individual employment plan, and provided direct employment counseling services. Volunteers assigned to the control group could not receive services from Project NetWork but remained eligible for any employment assistance already available in their communities. For both treatment and control groups, the demonstration waived specific DI and SSI program rules considered to be work disincentives. The experimental impact study thus measures the incremental effects of case and referral management services. The eight demonstration sites were successful in implementing the experimental design roughly as planned. Project NetWork staff were able to recruit large numbers of participants and to provide rehabilitation and employment services on a substantial scale. Most of the sites easily reached their enrollment targets and were able to attract volunteers with demographic characteristics similar to those of the entire SSI and DI caseload and a broad range of moderate and severe disabilities. However, by many measures, volunteers were generally more "work-ready" than project eligible in the demonstration areas who did not volunteer to receive NetWork services. Project NetWork case management increased average annual earnings by $220 per year over the first 2 years following random assignment. This statistically significant impact, an approximate 11-percent increase in earnings, is based on administrative data on earnings. For about 70 percent of sample members, a third year of followup data was available. For this limited sample, the estimated effect of Project NetWork on annual earnings declined to roughly zero in the third followup year. The findings suggest that the increase in earnings may have been short-lived and may have disappeared by the time Project NetWork services ended. Project NetWork did not reduce reliance on SSI or DI benefits by statistically significant amounts over the 30-42 month followup period. The services provided by Project NetWork thus did not reduce overall SSI and DI caseloads or benefits by substantial amounts, especially given that only about 5 percent of the eligible caseload volunteered to participate in Project NetWork. Project NetWork produced modest net benefits to persons with disabilities and net costs to taxpayers. Persons with disabilities gained mainly because the increases in their earnings easily outweighed the small (if any) reduction in average SSI and DI benefits. For SSA and the federal government as a whole, the costs of Project NetWork were not sufficiently offset by increases in tax receipts resulting from increased earnings or reductions in average SSI and DI benefits. The modest net benefits of Project NetWork to persons with disabilities are encouraging. How such benefits of an experimental intervention should be weighed against costs of taxpayers depends on value judgments of policymakers. Because different case management projects involve different kinds of services, these results cannot be directly generalized to other case management interventions. They are nevertheless instructive for planning new initiatives. Combining case and referral management services with various other interventions, such as longer term financial support for work or altered provider incentives, could produc     

Social Security Disability Benefits Reform Act of 1984: legislative history and summary of provisions

This article describes the legislative history of the Social Security Disability Benefits Reform Act of 1984 (Public Law 98-460), and contains a summary of the provisions in the new law. Major provisions include: standards for continuing disability reviews (CDR's) of disability insurance (DI) beneficiaries and supplemental security income (SSI) recipients who get payments based on disability or blindness; the right of a DI beneficiary or an SSI recipient to have payments continued during appeal of a CDR decision to an administrative law judge that disability or blindness has ceased; and suspension of CDR's of mentally impaired persons until the evaluation criteria for mental impairments are revised. The new law was enacted in response to problems that arose as a result of the implementation by the Social Security Administration (SSA) of a provision in the 1980 disability amendments that required periodic CDR's. In enacting the new law, Congress intended to assure more accurate, consistent, and uniform disability decisions at all levels and equitable and humane treatment not only to beneficiaries who must undergo CDR's but also to new applicants for DI benefits or SSI payments based on disability or blindness.     

Appeals under the SSI Program: January 1974-August 1976.

This study of appeals under the supplemental security income (SSI) program has several purposes: (1) To describe the appellate process and provide information on those requesting appeals (including reason for eligibility, program status, and age) and (2) to determine the relationship between these characteristics and the decisions at the three stages of the appellate process. About 312,000 reconsideration requests were processed from January 1974 to August 1976. These requests had been filed by adult and child SSI applicants who disagreed with the initial determinations of the Social Security Administration. Disabled persons requested nearly 95 percent of these reconsiderations. Approximately one-third of the applicants whose initial determination was reaffirmed after reconsideration then requested a hearing. Ninety-seven percent of these requests were filed by disabled persons. For those cases in which the earlier decisions were reaffirmed after hearings, 9,300 applicants requested a review by the Appeals Council. Eighty-two percent of these requests were denied.     

Disabled workers and the indexing of Social Security benefits

We examine how benefit amounts and family income would change in response to changing the Social Security (Old-Age, Survivors, and Disability Insurance, OASDI) benefit indexing scheme. We are interested in a class of reform options designed to gradually slow the growth of benefits across the board. These options include the "price indexing" and "longevity indexing" proposals that have been part of the recent Social Security reform debate in the United States as well as a range of proposals developed in Europe. In this article, we focus on the distributional effects on the disabled. This focus leads to two comparisons. First, we compare disabled-worker beneficiaries to another group that would be affected by the changes, retired-worker beneficiaries. Second, we examine relative changes for particularly vulnerable subgroups of disabled workers. In the empirical analysis, we use two illustrative examples of potential indexing changes: Shifting from wage indexing to price indexing of the initial level of OASDI benefits; and Adjusting the initial benefit level for changes in life expectancy at retirement, that is, longevity indexing. We employ a historical counterfactual simulation to evaluate outcomes that would have resulted from changing the indexing scheme at one particular point in time. The hypothetical implementation period begins with the historical start of the current regime of indexing in 1979 and ends with one of the reference periods of the 1996 Survey of Income and Program Participation (SIPP), a 17-year period. However, we briefly assess the extent to which the results would be applicable to other time horizons. The analysis uses a cross-sectional sample of OASDI beneficiaries from the 1996 SIPP matched to Social Security administrative records. Further, we use total income from the SIPP (as adjusted to correspond to the calculated OASDI benefit amounts) to simulate eligibility for Supplemental Security Income (SSI) and SSI benefit amounts. Our overall findings pertain to three outcomes: (1) effects on OASDI benefits viewed in isolation, (2) the offsetting role of SSI, and (3) the diluting effect of other sources of family income. We find that a broader perspective incorporating all three measures is necessary to obtain an appropriate picture of distributional outcomes. Even though the proposals were designed to have proportional effects, differences between groups--such as disabled and retired workers--can arise from differences in the timing of benefit claiming, mortality, and other factors. Specifically, our cross-sectional estimates suggest that the average change in OASDI benefit levels would be higher for disabled-worker beneficiaries than for retired-worker beneficiaries. These differences are attributable to the fact that a higher proportion of the stock of disabled beneficiaries have been on the Disability Insurance (DI) program rolls for a relatively short period of time and therefore have been affected by the shift in indexing scheme for a longer period of time. These results must be interpreted within the context of the methodology that was used. Further, other methodologies may lead to different results. For example, in previous studies that restricted the sample to a particular birth cohort, a higher proportion of disabled workers than retired workers were observed to have been on the DI program rolls for a relatively long period of time. Longer time on the beneficiary rolls corresponds to less exposure to the new indexing scheme and smaller estimated benefit changes. Thus, the same underlying factor-the timing of benefit claiming-influences both results. When the offsetting role of SSI benefits is also considered, we estimate smaller overall changes, especially for those at the bottom of the income distribution. When OASDI and SSI are considered together, differences in average benefit changes between disabled and retired workers are removed. This is due to a higher rate of SSI program participation among disabled workers than among retired workers. In addition, including SSI substantially reduces the proportion of disabled workers that have large simulated changes in benefit amounts. The estimated effects of changing the indexing scheme are further muted when total family income is considered. This occurs on a roughly equivalent scale for disabled and retired workers. As a result, changing the indexing scheme would produce little change in the status quo differences in poverty status between disabled and retired workers. Finally, we examine the most economically vulnerable subgroups of OASDI beneficiaries. Within the general group of beneficiaries, we find that the most vulnerable would be less affected than average, primarily as a result of the mitigating effect of SSI benefits. Further, within the population of disabled-worker beneficiaries, we examine economically vulnerable subgroups including those in the lowest primary insurance amount quartile, with less than a high school education, with an early onset of disability, or a primary mental impairment. These groups would also be less affected than average.     

Results of the Office of Policy's 2001 User Satisfaction Survey

In the summer of 2001, individuals who had an active professional interest in research or policy issues related to Social Security or to Supplemental Security Income (SSI) were surveyed by the Gallup Organization, under contract to the Social Security Administration (SSA). The survey had two goals. One was to determine the extent to which SSA's research, statistical, and policy analysis work was focusing on topics and issues of widespread concern to users. The other was to gauge user satisfaction with the products of that work. Most of SSA's research and analysis is carried out by the Office of Policy. Responses were obtained from 1,043 persons out of a sample of 1,800. Respondents were most likely to have been interested in Social Security or SSI issues for at least 10 years, to have used information from SSA multiple times during the preceding 2 years, and to have worked for the government, a college or university, or a nonprofit service organization. Results suggest that most users were satisfied with the quality of SSA's research, statistical, and policy analysis information products. Overall, 86 percent of those who had used products from SSA in the preceding 2 years were very or somewhat satisfied, 10 percent were neither satisfied nor dissatisfied, and only 4 percent were somewhat or very dissatisfied. 70 percent to 89 percent of users were satisfied with the accuracy, clarity, comprehensiveness, objectivity, timeliness, usefulness, and ease of finding the information. They were most satisfied with accuracy and objectivity and least satisfied with timeliness and the accessibility of products. 62 percent of respondents were very or somewhat satisfied with SSA's identification of and work on new and emerging research and policy issues over the past 2 years, 24 percent were neither satisfied nor dissatisfied, and 15 percent were somewhat or very dissatisfied. Respondents were asked to characterized their professional interests in two ways--as related primarily to Social Security, SSI, or both programs, and as related primarily to retirement issues, disability issues, or issues in both areas. Satisfaction varied, sometimes substantially, with professional interests. On all measures, Social Security specialists were more satisfied than SSI specialists, and retirement specialists were more satisfied than disability specialists. Note that of respondents interested primarily in the SSI program, 93 percent were also more interested in disability issues. The survey asked users to recommend ways of improving SSA's research, statistical, and policy analysis, and to recommend issues for SSA's research and policy agenda in the near future. Only 39 percent of users offered recommendations for improvement, and of those recommendations, no single issue predominated. In general, the most common recommendations were for increased data analysis in particular areas and for improved dissemination of information. A large proportion of respondents (77 percent) suggested issues that SSA should include in its research and policy agenda. Although the recommendations were quite diverse, two types appeared to dominate--disability issues and programs, and Social Security solvency and reform proposals. Some of the suggestions for disability research and policy work seem to suggest that the lower satisfaction ratings of specialists in this area reflect generalized dissatisfaction with the structure and administration of disability programs themselves rather than dissatisfaction with the quality of SSA's research and policy products. The Office of Policy is developing specific proposals for improving products and services, based on the survey's findings. By improving the quality and content of its statistical and analytical information, SSA will continue its efforts to meet the needs of a diverse research and policy community.     

Disability beneficiaries who work and their experience under program work incentives.

This research examines the return to work by Disability Insurance beneficiaries who were first entitled to benefits in 1980-81 and who were originally selected to be interviewed in the New Beneficiary Survey. To facilitate an examination of actual labor-force participation by beneficiaries, information on work and participation in program work incentives was collected from their claims folders. The analysis shows that approximately 10 percent of disability beneficiaries work during their initial period of benefit entitlement. About 80 percent are granted a trial work period, and over 70 percent of those granted trial work successfully complete it. More than half of them, however, were not successful in leaving the rolls through their work effort. In fact, benefit terminations due to work occurred for fewer than 3 percent of all beneficiaries in the cohort; approximately one-third of them had returned to the rolls by the end of the period under study. Beneficiaries most likely to make a work attempt were young and had a high level of education. Those with a high Social Security benefit amount were less likely to make a work attempt.     

How postsecondary education improves adult outcomes for Supplemental Security Income children with severe hearing impairments

The rapid growth in the number of children participating in the Supplemental Security Income (SSI) program before the age of 18 has led policymakers to consider new methods of assisting children with disabilities in their transition from school to work. Postsecondary education represents one path that SSI children may take to acquire the skills necessary to enter employment and reduce dependency on the SSI disability program as adults. Yet little is known about SSI children's experience with postsecondary education, let alone their ability to increase their labor market earnings and reduce their time on SSI as adults in the long term. This lack of information on long-term outcomes is due in part to a lack of longitudinal data. This article uses a unique longitudinal data set to conduct a case study of SSI children who applied for postsecondary education at the National Technical Institute for the Deaf (NTID) within the Rochester Institute of Technology. The data set was created by merging NTID administrative data on the characteristics and experiences of its applicants to Social Security Administration (SSA) longitudinal data on earnings and program participation. We used this data file to estimate the likelihood that an SSI child will graduate from NTID relative to other hearing-impaired NTID applicants, and we estimated the influence of graduation from NTID on participation in the SSI adult program and later success in the labor market. The results of our analysis show that the percentage of NTID applicants who were SSI children increased over time, from a low of 10 percent in 1982 to more than 41 percent in 2000. However, the differences in the probability of graduation from NTID between deaf SSI children and deaf applicants who were not SSI children did not change accordingly. The probability of graduation for SSI children who applied to NTID was 13.5 percentage points lower than for those who were not SSI children. The estimated disparity indicates that targeting college retention programs toward SSI children may be an effective way to improve overall graduation rates. Our results also show that SSI children who graduated from NTID spent less time in the SSI adult program and had higher earnings than SSI children who did not gradu- ate. Compared with SSI children who were accepted to NTID but chose not to attend, SSI children who graduated from NTID left the SSI program 19 months earlier, were less likely to reenter the program, and at age 30 had increased their earnings by an estimated 49 percent. Our findings demonstrate that SSI children need not be relegated to a lifetime of SSI participation as adults, despite the poor overall labor market experience of this population since the creation of the SSI program in 1974.     

Disability benefit coverage and program interactions in the working-age population

Over three-fourths of the working-age population in the United States is insured for Disability Insurance (DI); this group is protected against a total loss of earned income typically associated with severe disability. However, little is known about the role the Supplemental Security Income (SSI) program plays in protecting against the financial consequences of severe disability for this population. We find that over one-third (36 percent) of the working-age population is covered by SSI in the event of a severe disability. Three important implications follow, which we discuss in sequence below: (1) SSI increases the overall coverage of the working-age population; (2) SSI enhances the bundle of cash benefits available to disabled individuals; and (3) interactions with other programs also enhance the safety net, most notably in the area of health insurance coverage. Ignoring these implications could lead to inaccurate inferences about disability program coverage, health insurance coverage, and the well-being of working-age individuals with disabilities. The first major finding is that SSI substantially increases overall cash benefit coverage. Thus SSI dramatically increases protection against the financial risk of disablement in the working-age population. While roughly 23 percent of the U.S. working-age population was not insured for DI in November 1996, SSI provides coverage for more than half of this seemingly "uncovered" population. An important innovation of our analysis is that we account for the possibility that many of those who appear ineligible for SSI based on current income could become eligible as a result of a disability shock that causes their earnings to drop. Thus the estimated proportion that is protected by SSI increases when the possibility of earnings loss because of disability is considered. Considering DI and SSI together, roughly 90 percent of the working-age population would be potentially covered for benefits in the event of a disability. Those who are covered by SSI--as opposed to those covered by DI alone-tend to be relatively young, less educated, and in relatively poor health. The remaining 10 percent or so are not covered by either DI or SSI. This group is economically vulnerable in some sense (they are poorer, older, and more likely to be women than those covered only by DI), but they are not as economically vulnerable in terms of income, resource holdings, and private health insurance coverage as those who are eligible for SSI. A disproportionate share of those who are not covered by either DI or SSI consists of married women. The second major finding is that SSI substantially enhances the bundle of available cash benefits. Roughly one-third of those covered by DI are initially covered by SSI as well. SSI enhances the bundle of available cash benefits through two mechanisms: (1) SSI provides cash payments during the 5-month DI waiting period, and (2) SSI supplements the DI benefit after the DI waiting period for people whose initial SSI payment is larger than the DI benefit. We find that the role of SSI cash payments is temporary for most of those who are initially covered by both SSI and DI: They would receive SSI during the DI waiting period, but would lose SSI eligibility afterwards because the higher DI benefit completely offsets the SSI benefit. However, a smaller group of DI beneficiaries with low DI benefit levels would continue to be covered by both SSI and DI after the DI waiting period because the relatively low DI benefit would not completely offset the SSI benefit. The third major finding is that interactions with other programs also substantially enhance the safety net. The most important interactions involve health insurance coverage. In the working-age population, Medicare is available to DI beneficiaries, but only after a 24-month waiting period. By contrast, SSI is an important pathway to Medicaid benefits for severely disabled adults with limited income and resources and has no waiting period. SSI can provide a pathway to health insurance coverage during the 24-month Medicare waiting period for some DI beneficiaries through providing access to Medicaid. Interactions with other programs, such as Temporary Assistance for Needy Families (TANF), Food Stamp, Unemployment Insurance (UI), workers' compensation (WC), and veterans' disability programs, modify the role of DI and SSI in protecting people against the adverse financial effects of disablement. The nature of the interactions with other programs differs depending on individual circumstances. Employment-related programs (including UI, WC, and veteran's disability programs) are particularly important for those who are covered by DI. By contrast, the means-tested programs (including TANF and Food Stamp) are more important for those who would be eligible for SSI. In conclusion, SSI plays a substantial role in protecting working-age people against the adverse financial consequences of disablement through three mechanisms: (1) providing coverage to many who are not DI insured; (2) providing additional cash benefits to many who are DI insured and also covered by SSI; and (3) enhancing the social safety net by interacting with other programs, most notably Medicaid. Through these mechanisms, the role of SSI is substantial enough that it cannot be safely ignored in econometric and policy research on DI.     

SSI at its 25th year.

Beginning in January 1974, the three previously existing State adult assistance programs were amalgamated into the Supplemental Security Income (SSI) program, to be administered by the Social Security Administration. This change was made to provide a nationwide floor of income for needs-based assistance, and to make such payments more efficiently by working through SSA's existing network of field offices. This article traces the 25-year patterns of growth and changes in the number of persons applying for assistance, the number and proportion of those applicants who were awarded payments, and the overall number of persons who received SSI. Three major age groups are considered separately: those aged 65 or older, disabled adults aged 18-64, and children age 18 and younger. The last group was newly eligible under SSI for payments based on their own blindness or disability and not, as was the case previously, because they were a member of a needy family.     

Identifying the race or ethnicity of SSI recipients

The Social Security Administration (SSA) has, from its beginnings, recorded the race and ethnicity provided by those who apply for a Social Security card. Although some of these data are eventually used in published tabulations when persons file for benefits, problems with the data prevent a larger selection of published tables. These problems stem from: incomplete internal SSA computer processing; changes in the racial coding schemes over time; and missing codes for younger cohorts of applicants. In spite of these problems, more data can be shared with the public. This article shows how matching administrative files and using statistical techniques make it possible to associate a race/ethnicity code with the great majority of persons receiving a payment under the Supplemental Security Income (SSI) program, a means-tested program for persons who are aged or disabled. The article follows a 1-percent sample of SSI recipients through several steps in an attempt to develop a race code. This approach can provide data for the next several years on the race of all SSI recipients, as well as data on race and ethnicity for recipients under age 40. Beyond the next few years, these techniques will become less useful, and other methods will be needed. SSA is in the process of revising its standards for classification of federal data on race and ethnicity. The census for year 2000 will include coding changes. Other federal agencies will be given as long as January 2003 to comply with the new guidelines.     

Longitudinal statistics on work activity and use of employment supports for new Social Security Disability Insurance beneficiaries

We present longitudinal employment and work-incentive statistics for individuals who began receiving Social Security Disability Insurance (DI) benefits from 1996 through 2006. For the longest-observed cohort, 28 percent returned to work, 6.5 percent had their benefits suspended for work in at least 1 month, and 3.7 percent had their benefits terminated for work. The corresponding percentages are much higher for those who were younger than age 40 when they entered the DI program. Most first suspensions occurred within 5 years after entry. Cross-state variation in outcomes is high, and, to the extent observed, statistics for more recent cohorts are lower.