The Impact of Rehabilitation and Counseling Services on the Labor Market Activity of Social Security Disability Insurance (SSDI) Beneficiaries

We use data from a social experiment to estimate the impact of a rehabilitation and counseling program on the labor market activity of newly entitled Social Security Disability Insurance (SSDI) beneficiaries. Our results indicate that the program led to a 4.6 percentage point increase in the receipt of employment services within the first year following random assignment and a 5.1 percentage point increase in participation in the Social Security Administration's Ticket to Work program within the first three years following random assignment. The program led to a 5.3 percentage point increase, or almost 50 percent increase, in employment, and an $831 increase in annual earnings in the second calendar year after the calendar year of random assignment. The employment and earnings impacts are smaller and not statistically significant in the third calendar year following random assignment, and we describe SSDI rules that are consistent with this finding. Our findings indicate that disability reform proposals focusing on restoring the work capacity of people with disabilities can increase the disability employment rate.     

Adding immigrants to microsimulation models

Forecasts of the financial status of Social Security's Old-Age, Survivors, and Disability Insurance (OASDI) programs and forecasts of the effects of various OASDI policy options on Americans would be improved if information about the earnings and labor force behavior of various population subgroups were included in projection models. Focusing on the projection of immigrant earnings, this article proffers a conceptual basis for incorporating immigration into microsimulation models. Key results from research on immigrant earnings, as described in the first article in this trilogy--"Research on Immigrant Earnings"--are linked to methods for forecasting individual earnings in microsimulation models. The research on immigrant earnings also inspires new methods for forecasting earnings in microsimulation models as well as the projection of immigrant emigration. Forecasting immigrant earnings and emigration is discussed in the context of a "closed system"--that is, forecasts are only made for a given population, which is represented in the base sample of the microsimulation model. The third article in our trilogy--"Incorporating Immigrant Flows into Microsimulation Models"--explores how to project immigrant earnings in the context of an "open system," which includes future immigrants.     

Vocational Rehabilitation Services and Labor Market Outcomes for Transition-Age Youth with Disabilities in Maine

Using administrative data from Maine to quantify the effect of vocational rehabilitation (VR) services on employment outcomes for transition-age youth with disabilities, we exploited the variation in VR counselors’ propensity to develop Individualized Plans for Employment (IPEs) for VR youth as an instrument for service receipt. We found that among the estimated 36 percent of VR clients on the margin of service receipt, having an IPE implemented increases quarterly employment rate by 15.4 percentage points and quarterly earnings by $1,442 (2018 dollars). We found heterogeneous program effects with individuals 18 or younger benefiting significantly more than those older than age 18 at the time of VR application. We estimate the annual real rate of return to be 10.2 percent for two years after VR case closure.     

Lifetime earnings patterns, the distribution of future Social Security benefits, and the impact of pension reform

In order to assess the effect of Social Security reform on current and future workers, it is essential to accurately characterize the initial situations of representative workers affected by reform. For the purpose of analyzing typical reforms, the most important characteristic of a worker is the level and pattern of his or her preretirement earnings. Under the current system, pensions are determined largely by the level of the workers' earnings averaged over their work life. However, several reform proposals would create individual retirement accounts for which the pension would depend on the investment accumulation within the account. Thus, the pension would also depend on the timing of the contributions into the account and hence on the exact shape of the worker's lifetime earnings profile. Most analysis of the distributional impact of reform has focused, however, on calculating benefit changes among a handful of hypothetical workers whose relative earnings are constant over their work life. The earnings levels are not necessarily chosen to represent the situations of workers who have typical or truly representative earnings patterns. Consequently, the results of such analysis can be misleading, especially if reform involves introducing a fundamentally new kind of pension formula. This article presents two broad approaches to creating representative earnings profiles for policy evaluation. First, we use standard econometric methods to predict future earnings for a representative sample of workers drawn from the Survey of Income and Program Participation (SIPP). Our statistical estimates are based on a simple representation of typical career earnings paths and a fixed-effect statistical specification. Because our estimation file contains information on each worker's annual earnings from 1951 through 1996 as reported in the Social Security Administration's earnings files, we have a record (though an incomplete one) of the actual earnings that will be used to determine future benefit payments. Our estimates of the earnings function permit us to make highly differentiated predictions of future earnings for each member of our sample. By combining the historical information on individual earnings with our prediction of future earnings up through the normal retirement age, our first approach produces tens of thousands of predicted career earnings paths that can be used in microsimulation policy analysis. Our second approach to creating lifetime earnings profiles is similar in some ways to the traditional method. For example, it is based on the creation of only a handful of "stylized" career earnings patterns. An important difference with the traditional method, however, is that we define the career earnings patterns so that they are truly representative of patterns observed in the workforce. We use simple mathematical formulas to characterize each stylized earnings pattern, and we then produce estimates of the average path of annual earnings for workers whose career earning path falls within each of the stylized patterns we have defined. Finally, we calculate the percentage of workers in successive birth-year cohorts who have earnings profiles that match each of the stylized earnings patterns. Although this method may seem simple, it allows the analyst to create stylized earnings patterns that are widely varied but still representative of earnings patterns observed among sizable groups of U.S. workers. The effects of policy reforms can then be calculated for workers with each of the stylized earnings patterns. Our analysis of U.S. lifetime earnings patterns and of the impact of selected policy reforms produces a number of findings about past trends in earnings, typical earnings patterns in the population, and the potential impact of reform. The analysis focuses on men and women born between 1931 and 1960. Along with earlier analysts, we find that men earn substantially higher lifetime wages than women and typically attain their peak career earnings at a somewhat earlier age. However, the difference in career earnings patterns between men and women has narrowed dramatically over time. Workers with greater educational attainment earn substantially higher wages than those with less education, and they attain their peak career earnings later in life. For example, among men with the least education, peak earnings are often attained around or even before age 40, whereas many men with substantial postsecondary schooling do not reach their peak career earnings until after 50. Our tabulations of the lifetime earnings profiles of the oldest cohorts (born around 1930) and projections of the earnings of the youngest profiles (born around 1960) imply that the inequality of lifetime earnings has increased noticeably over time. Women in the top one-fifth of female earners and men in the top one-fifth of male earners are predicted to receive a growing multiple of the economy-wide average wage during their career. Women born between 1931 and 1935 who were in the top fifth of female earners had lifetime average earnings that were approximately equal to the average economy-wide wage. In contrast, women born after 1951 who were in the top fifth of earners are predicted to earn almost 50 percent more, that is, roughly 150 percent of the economy-wide average wage. Women with a lower rank in the female earnings distribution will also see gains in their lifetime average earnings, but their gains are predicted to be proportionately much smaller than those of women with a high rank in the distribution. Men with high earnings are also predicted to enjoy substantial gains in their relative lifetime earnings, while men with a lower rank in the earnings distribution will probably see a significant erosion in their typical wages relative to the economy-wide average wage. That is mainly the result of a sharp decline in the relative earnings of low-wage men born after 1950. In creating stylized earnings profiles that are representative of those of significant minorities of U.S. workers, we emphasized three critical elements of the earnings path: the average level of earnings over a worker's career, the upward or downward trend in earnings from the worker's 30s through his or her early 60s, and the "sagging" or "hump-shaped" profile of earnings over the worker's career. That classification scheme yields 27 characteristic patterns of lifetime earnings. Surprisingly, the differnce between men and women within each of those categories is quite modest. The main difference between men and women is in the proportions of workers who fall in each category. Only 14 percent of men born between 1931 and 1940 fall in earnings categories with the lowest one-third of lifetime earnings, whereas 53 percent of women born in those years have low-average-earnings profiles. On the other hand, women born in those years are more likely to have a rising trend in lifetime earnings, while men are more likely to have a declining trend. We find that the distribution of lifetime earnings contains relatively more workers with below-average earnings and relatively fewer with very high earnings than assumed in the Social Security Administration's traditional policy analysis. For example, the "low earner" traditionally assumed by the Office of the Chief Actuary is assigned a level of average lifetime earnings that we find to be higher than the average earnings of persons in the bottom one-third of the lifetime earnings distribution. The stylized earnings profiles developed here can be used for policy evaluation, and the results can be compared with those from the more traditional analysis. That comparison produces several notable findings. Because earnings profiles that are actually representative of the population tend to have lower average earnings than assumed in the traditional analysis, workers typically accumulate somewhat less Social Security wealth than implied in the traditional analysis. On the other hand, because the basic benefit formula is tilted in favor of lower-income workers, the internal rate of return on Social Security contributions is somewhat higher than detected in the traditional analysis. Moreover, the primary insurance amount measured as a percentage of the worker's average indexed earnings tends to be higher than implied by the traditional analysis. Finally, the stylized earnings patterns can be used to compare benefit levels enjoyed by workers under the traditional Social Security formula and under an alternative plan based on individual investment accounts. That comparison shows, as expected, that the traditional formula favors low-wage workers and one-earner couples, while an investment account favors single, high-wage workers. Comparing two workers with the same lifetime average earnings, the traditional formula favors workers with rising earnings profiles (that is, with lifetime earnings heavily concentrated at the end of their career), while investment account pensions favor workers with declining earnings profiles (that is, with earnings concentrated early in their career).     

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.     

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.     

Outcomes–Based Performance Management in the Public Sector: Implications for Government Accountability and Effectiveness

Requirements for outcomes–based performance management are increasing performance–evaluation activities at all government levels. Research on public–sector performance management, however, points to problems in the design and management of these systems and questions their effectiveness as policy tools for increasing governmental accountability. In this article, I analyze experimental data and the performance–management experiences of federal job–training programs to estimate the influence of public management and system–design factors on program outcomes and impacts. I assess whether relying on administrative data to measure program (rather than impacts) produces information that might misdirect program managers in their performance–management activities. While the results of empirical analyses confirm that the use of administrative data in performance management is unlikely to produce accurate estimates of true program impacts, they also suggest these data can still generate useful information for public managers about policy levers that can be manipulated to improve organizational performance.     

ECONOMICS AND IMPACT ASSESSMENT: CETERIS PARIBUS OR MUTATIS MUTANDIS

Economic theory frequently uses ceteris paribus assumptions to hold complicating variables constant to analyze the effect of one variable on another. Policy-makers must consider effects of policies with other things changing as they will (i.e., mutatis mutandis). Impact assessment can recon- cile the often narrow approach of economic analysis and the need for broad consideration of implications. The methods of impact assessment can pro- vide a proper place for economic analysis in policy assessment and help to assure that a broad range of impacts are included to determine the economic effects of events and decisions.     

USING LINEAR TREND MODELS TO ANALYZE POLICY IMPACT

Policy researchers have become increasingly familiar with a number of improved techniques for analyzing data obtained from interrupted time-series designs for evaluating public programs and policies. In this paper we contribute to this trend by presenting two groups of data analysis techniques which are not currently widely used by policy researchers, but are likely to be valuable adjuncts to traditional regression techniques for analyzing data obtained from interrupted time-series designs. First, aids for model specification are presented that enable the analyst to define an appropriate linear trend model—often one which will reduce the degree of multicollinearity and, therefore, produce more precise estimates of the impacts of a public program or policy. Next we consider approaches for point estimation and joint (simultaneous) interval estimation of a policy intervention's total effect at various points in time.     

Using the Results from Rigorous Multisite Evaluations to Inform Local Policy Decisions

Evidence‐based policy at the local level requires predicting the impact of an intervention to inform whether it should be adopted. Increasingly, local policymakers have access to published research evaluating the effectiveness of policy interventions from national research clearinghouses that review and disseminate evidence from program evaluations. Through these evaluations, local policymakers have a wealth of evidence describing what works, but not necessarily where. Multisite evaluations may produce unbiased estimates of the average impact of an intervention in the study sample and still produce inaccurate predictions of the impact for localities outside the sample for two reasons: (1) the impact of the intervention may vary across localities, and (2) the evaluation estimate is subject to sampling error. Unfortunately, there is relatively little evidence on how much the impacts of policy interventions vary from one locality to another and almost no evidence on the implications of this variation for the accuracy with which the local impact of adopting an intervention can be predicted using findings from an evaluation in other localities. In this paper, we present a set of methods for quantifying the accuracy of the local predictions that can be obtained using the results of multisite randomized trials and for assessing the likelihood that prediction errors will lead to errors in local policy decisions. We demonstrate these methods using three evaluations of educational interventions, providing the first empirical evidence of the ability to use multisite evaluations to predict impacts in individual localities—i.e., the ability of “evidence‐based policy” to improve local policy.     

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.     

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.     

Employment among Social Security disability program beneficiaries, 1996-2007

We use linked administrative data from program and earnings records to summarize the 2007 employment rates of Social Security disability program beneficiaries at the national and state levels, as well as changes in employment since 1996. The findings provide new information on the employment activities of beneficiaries that should be useful in assessing current agency policies and providing benchmarks for ongoing demonstration projects and future return-to-work initiatives. The overall employment rate--which we define as annual earnings over $1,000--was 12 percent in 2007. Substantial variation exists within the population. Disability Insurance beneficiaries and those younger than age 40 were much more likely to work relative to other Social Security beneficiaries. Additionally, substantial regional variation exists across states; employment rates ranged from 7 percent (West Virginia) to 23 percent (North Dakota). Moreover, we find that the employment rates among beneficiaries were sensitive to the business cycle and persistent over time.     

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.     

Housing Voucher Take‐Up and Labor Market Impacts

Low participation rates in government assistance programs are a major policy concern in the United States. This paper studies take‐up of Section 8 housing vouchers, a program in which take‐up rates are quite low among interested and eligible households. We link 18,109 households in Chicago that were offered vouchers through a lottery to administrative data and study how baseline employment, earnings, public assistance, arrests, residential location, and children's academic performance predict take‐up. Our analysis finds mixed evidence of whether the most disadvantaged or distressed households face the largest barriers to program participation. We also study the causal impact of peer behavior on take‐up by exploiting idiosyncratic variation in the timing of voucher offers. We find that the probability of lease‐up increases with the number of neighbors who recently received voucher offers. Finally, we explore the policy implications of increasing housing voucher take‐up by applying reweighting methods to existing causal impact estimates of voucher receipt. This analysis suggests that greater utilization of vouchers may lead to larger reductions in labor market activity. Differences in take‐up rates across settings may be important to consider when assessing the external validity of studies identifying the effects of public assistance programs.     

Effect on benefits of earnings at ages 65 or older, 1995.

A major policy issue for the Social Security program is the treatment of earnings of persons who have attained retirement age. This article discusses the retirement test and recomputation of benefit provisions, and provides statistical data for 1995. In 1995, about 806,000 persons aged 65-70 had significant earnings resulting in the withholding of benefits by the retirement test. About 1,659,000 persons aged 65 or older realized an increase in their benefit amount because of their earnings.     

Public policy analysis in Washington and Ottawa

Policy analysis in the U.S. and Canada tends to follow the methods of systems analysis and takes into account variables relating to substantive matters as well as political and administrative constraints that governments face in pursuing different alternatives.Comparative analysis of the political effectiveness of the two governments in implementing the results of analysis indicates that Canada has built-in constitutional advantages. Comparative assessment of bureaucratic skills in policy analysis and policy implementation suggests that the American system is relatively weaker in terms of implementation, but relatively stronger in terms of policy analytical skills. This is followed by an assessment of the attempts made by the U.S. government to improve its policymaking structures through the setting up of the Domestic Council and the reorganized OMB, and the Canadian attempts to improve its policymaking capabilities through a reorganized Cabinet committee system and the strengthening of the Privy Council Office.The final section suggests that analysis of values and norms should be an integral part of policy analysis. The scope of policy analysis should be extended to include long-term economic and political analyses.     

Social Security disability beneficiaries with work-related goals and expectations

This study examines working-age Social Security Disability Insurance and Supplemental Security Income beneficiaries who report having work goals or expectations, referring to these individuals as "work-oriented." The study uses data from the 2004 National Beneficiary Survey matched to administrative data spanning 2004-2007 to identify work-oriented beneficiaries and to analyze their sociodemographic, health, and employment characteristics, as well as their earnings-related benefit suspensions and terminations. Relative to other disability beneficiaries, the 40 percent classified as work-oriented were younger and more educated, had been on the disability rolls a shorter time, had lower income from public assistance, and were healthier. Just over half had recently engaged in work or in work preparation activities at interview, about half had earnings at some point during 2004-2007, and 10 percent left the disability rolls because of earnings for at least 1 month during that period. The findings show that a large share of beneficiaries have work goals, most are attempting to work, and many experience some success.     

The employment and redistributive effects of reducing or eliminating minimum wage tip credits

Recent policy debate on minimum wages has focused not only on raising the minimum wage, but on eliminating the tip credit for restaurant workers. We use data on past variation in tip credits—or minimum wages for restaurant workers—to provide evidence on the potential impacts of eliminating (or reducing) the tip credit. Our evidence points to higher tipped minimum wages (smaller tip credits) reducing jobs among tipped restaurant workers, without positive earnings effects on those who remain employed sufficiently large to raise total earnings in this sector. And most of our evidence provides no indication that higher tipped minimum wages would be well targeted to poor or low-income families or reduce the likelihood of being poor or very low income.     

Using data for couples to project the distributional effects of changes in Social Security policy

Under Social Security program rules, the aged receive Social Security benefits either as retired workers, spouses, divorced spouses, or widow(er)s. Retired-worker benefits are paid to workers who have 40 quarters of coverage over their lives. Auxiliary benefits are paid to spouses, divorced spouses, and widow(er)s of retired workers. Spouse benefits are computed using the earnings history of the current spouse for individuals who are married when they apply for benefits. Divorced spouse and widow(er) benefits are computed using the earnings history of the ex-spouse or deceased spouse with the highest PIA. A large number of retired women are entitled to auxiliary benefits. Some women receive only auxiliary benefits, while the majority of women have their retired-worker benefit supplemented by auxiliary benefits. Because the level of Social Security benefits can reflect the relative lifetime earnings of both spouses, as a couple, using individual data to estimate Social Security benefits will tend to underestimate actual benefits, particularly for women. However, detailed data for couples are often difficult to obtain. There is currently no known single data source that includes both marital and earnings history information. As a result, many researchers resort to estimating Social Security benefits using individual data or aggregate data, such as the average earnings of men and women. The Social Security Administration's Office of Research, Evaluation, and Statistics, with substantial assistance from the Brookings Institution, the Urban Institute, and the RAND Corporation, is developing a model that overcomes this problem by using the marital and earnings histories of both marital partners to estimate Social Security benefits. The Modeling Income in the Near Term (MINT) model projects retirement income (Social Security benefits, pension income, asset income, and earnings of working beneficiaries) from 1997 through 2031 for current and future Social Security beneficiaries using a unique data source--the Survey of Income and Program Participation (SIPP)--matched to Social Security Administration records. Using MINT data, this article establishes the importance of using data for couples rather than individuals by examining the impact of changing Social Security benefits to reflect 40 years of lifetime earnings rather than the 35 years required under current law. We compare the effect of this policy change on married women by estimating their benefits with data for couples and with individual data. Results indicate that: Using individual data overestimates the projected reduction in retirement benefits brought about by the policy change and makes the effects on women look more severe than they actually are. Because older birth cohorts are more likely than younger cohorts to receive auxiliary benefits based on their husbands' average lifetime earnings, the bias created by using individual data is projected to be much larger for older cohorts than for younger cohorts. This article emphasizes the importance of using data for couples to estimate Social Security benefits, particularly for women. Although our focus is on married women, using data for couples is just as important for calculating the retirement benefits of divorced and widowed individuals. For individuals who are divorced or widowed at retirement, their Social Security benefits are based on their own earnings history, as well as the earnings histories of each of their previous spouses.