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.     

The U.S. study of work incapacity and reintegration

In many countries, including the United States, the number of persons being awarded long-term or permanent disability benefits has risen dramatically in recent years. Government agencies, advocates for the disabled, and others are looking for ways to help persons with disabilities return to the labor force. The Work Incapacity and Reintegration (WIR) Study was developed to address that issue. The United States and five other countries--Germany, Denmark, Sweden, Israel, and the Netherlands--have participated in a cross-national study of work incapacity under the auspices of the International Social Security Association. The study had two objectives: to examine the factors that influence the pattern of work resumption among persons disabled by a back condition and to identify the medical and nonmedical interventions that are most effective in helping such persons reenter the labor force. Samples for the U.S. national study were drawn from four cohorts: Social Security Disability Insurance (DI) beneficiaries, Supplemental Security Income (SSI) beneficiaries, and recipients of temporary disability insurance (TDI) benefits from the states of California and New Jersey. Only the TDI recipients were included in the comparative study. This article discusses the study design and methodology and summarizes the findings of the U.S. national study. Findings from the U.S. study show significant differences between the two cohorts in terms of work resumption and other characteristics. The proportions of respondents from the TDI cohorts who were working at the third and final study contact ranged from 53 percent to 65 percent, compared with less than 5 percent of the DI and SSI respondents. Respondents from the DI and SSI cohorts were on average about 10 years older than the TDI respondents, were less well educated, and reported more physical demands in their usual work. They also reported lower levels of functional capacity, higher levels of pain, and a much greater tendency to have other chronic illnesses. The types of medical treatments provided were remarkably uniform across cohorts and, within cohorts, between those who did and did not resume working. Thus, no medical intervention was identified that showed a significantly higher success rate in terms of facilitating a return to work. However, changes made in the work environment by the employer were an important factor in work reintegration; about 80 percent of respondents who resumed working did so with the help of workplace accommodations. In addition, since respondents with fewer physical demands in their job were more likely to return to work, there appears to be some potential for job retraining as a means of promoting a return to work. The Social Security Administration should consider these findings in developing strategies to help disabled workers reenter the labor force.     

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.     

Recent trends in the Social Security Disability Insurance Program

Earlier analysis documented the rapid growth of the Disability Insurance (DI) program from 1966 to 1975; this article discusses trends since 1975. Over the decade of the 1970's, the population insured for disability increased by 34 percent, and women as a proportion of the insured population rose from 32.4 percent in 1970 to 39.1 percent in 1980, reflecting the increase in female labor-force participation. Of disabled workers receiving benefits, the proportion that were women rose from 28.4 percent in 1970 to 32.4 percent in 1979. Although inflation caused total benefit costs to rise over the entire period, the number of DI beneficiaries began to decline in 1978. Disabled-worker awards reached a peak in 1975 and fell subsequently so that the 1969 and 1981 figures are approximately equal. Relative to 1970, the fraction of awards going to women increased, the share for persons aged 50-54 rose, and the proportion received by those aged 60-64 declined. Decreased in total awards, and hence recipients, stemmed primarily from higher rates of denial at both the initial application and the reconsideration stages. Higher denials were countered by substantial rises in the number of hearings and reversals by administrative law judges (ALJ's). in 1980, only 65 percent of all awards came from initial applications, while over a fourth resulted from ALJ reversals. In future years, recent legislative changes may be expected to curtail program expansion further.     

Income of new disabled-worker beneficiaries and their families: findings from the New Beneficiary Survey

In 1982, disabled workers who came on the social security disability insurance rolls from mid-1980 to mid-1981 had median monthly incomes of less than $500 if they were unmarried and less than $1,300 if they were married. These median monthly income levels, which include the income of a spouse and minor children if present, are roughly half those of the noninstitutionalized population aged 25-64. Social security benefits are the most important source of income for disabled workers and their families: They account for 40 percent of the total family income of married disabled workers and 65 percent of the total income of unmarried disabled workers. Social security benefits provide at least half of all income for more than 80 percent of unmarried disabled-worker beneficiaries and for 50 percent of the married beneficiaries. For married disabled-worker beneficiaries, earnings of the spouse are the second most important income source. Spousal earnings account for 28 percent of total income. Pensions and asset income each account for about 10 percent of total income for these married beneficiaries. Earnings are not an important source of income for unmarried disabled-worker beneficiaries for whom they amount to only about 3 percent of total income. Pensions, asset income, and public transfers each account for about 10 percent of total income of the unmarried beneficiaries.     

Medicare utilization by disabled-worker beneficiaries: a longitudinal analysis

Medicare eligibility for Social Security disabled-worker beneficiaries begins after 2 years of cash benefit receipt. Extension of the current coverage is often proposed as a way to encourage beneficiaries to return to work. Little is known, however, about the long-run Medicare costs for the disabled and how costs vary by demographic and health characteristics. This article describes Medicare utilization and reimbursement amounts for 1974-81 for a cohort of disabled-worker beneficiaries under age 62 and first entitled to cash benefits in 1972. The data come from a first-time linkage of Disability Insurance program data with data on Medicare utilization. The tables provide a detailed look at several factors that are associated with variation in Medicare costs among beneficiaries and over time.     

Labor trajectories and reproductive behavior: a comparison between Mexico and Spain

Data from the 1987 Mexican National Survey of Fertility and Health and the fertility survey carried out by Spain's National Institute of Statistics in 1985 were the basis for a comparison of the fertility histories and labor force participation of women of different cohorts in the two countries. Both surveys included questions on employment before marriage, between marriage and the birth of the first child, and at the present time. Eight combinations were possible, including continuous employment in all three periods and no history of employment in any period. The survey populations included women ever married or in union, with at least one live-born child, and aged between 15 and 49 years for Mexico and 18 and 49 years in Spain. Economic conditions in Mexico and Spain are dissimilar, and women's labor force participation patterns have varied as well. The Mexican survey indicated a current labor force participation rate of 37% for women aged 20-49. 42% of women aged 30-39 were employed. In Spain, 43% of women aged 18-49 were economically active. Around 60% of widowed, divorced, separated, and single women were employed. In Mexico, 38.2% of respondents had not worked in any of the three periods, 20.4% had worked in all three, and 17/7% had worked only before the first marriage or union. 61.5% of Mexican respondents had worked in at least one of the three periods. The cohort born in 1957-61 appears to be transitional to a pattern in which work outside the home assumes greater importance. In Spain, 31.3% of respondents had worked only before the first marriage or union, 24.8% had never worked, and 23.7% had worked in all three periods. 75.2% had worked in at least one of the three periods. The older Spanish cohorts had lower rates of labor force participation and the younger cohorts tendered to have higher activity rates, combining motherhood and outside employment to a greater extent. The cohort aged 25-29 at the time of the survey, which had a high proportion of women working continuously in the three periods and an intense activity rate at the time of the survey, appeared to be the transitional cohort between traditional and modern lifestyles. Thus, in both countries the cohorts aged 25-29 were those which managed to combine childbearing with employment to the greatest extent. In both Mexico and Spain,, the women within the cohort aged 25-29 with the highest activity rates were those with higher levels of education and those living in larger cities.     

Economic security, 1935-85

The economic well-being of both working and retired persons has improved significantly since the Social Security Act was passed in 1935. More people are employed now than at any time since then, despite declining employment among the aged and more years of school attendance among the young. The ratio of non-workers to workers--a broad measure of dependency--is lower now than at any time since the 1930's. Social security has grown and matured to become a strong foundation of retirement income, and other work-related employee benefits have grown in tandem with social security. Employer contributions for social insurance and related employee benefits have grown from being about a 1-percent supplement to aggregate wages and salaries in 1929 to nearly 20 percent today. Social security and Medicare account for just over a fourth of employer contributions, while other public and private retirement systems represent just over another fourth. The balance of benefits for active workers includes group health and life insurance, unemployment insurance, workers' compensation, temporary disability insurance, and related benefits. Pay for holidays, vacations, and sick leave is estimated to have increased from less than 1 percent of aggregate pay in 1929 to about 10 percent today. The improved economic status of the aged has been documented by a series of surveys beginning in 1941-42 and carried out from time to time until 1972 and biennially since 1976. The earlier surveys were supplemented with estimates from record data and tables from the Bureau of the Census. The income of the aged as a whole has grown by about 75 percent over the past 2 decades after taking inflation into account. The income of the aged as a whole grew faster than that of the nonaged in the 1970's and early 1980's when real social security benefits increased faster than inflation and wages lagged behind it. New beneficiaries in 1982 were in better health and were more likely to retire because they wanted to than was true of their counterparts in the early 1940's. Not only have benefits continued to be the main component of income of the aged as total incomes have grown, but also benefits have become much larger in relation to average earnings than used to be the case. Retired workers are much more likely now than in the early 1940's to have other pensions or income from assets to supplement benefits.(ABSTRACT TRUNCATED AT 400 WORDS)     

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.     

Disabled-worker beneficiaries under OASDI: comparison with severely disabled PA recipients.

The 1972 Survey of Disabled and Nondisabled Adults found that more than 1 million severely disabled persons aged 20-64 were receiving payments under Federal-State public assistance programs. To determine the reasons why most of these individuals did not qualify for disabled-worker benefits under the social security program, their characteristics were compared with those of the approximately 1.5 million disabled-worker beneficiaries. The public assistance recipients were found to be younger and less well educated than their disabled-worker beneficiary counterparts. A greater proportion of them were women and more were members of minority races. Public assistance recipients became disabled at an earlier age and had been disabled longer. Compared with disabled-worker beneficiaries, they had held less skilled jobs, had earned less money, and had had a weaker attachment to the labor force. These characteristics greatly reduced their chances of qualifying for disabled-worker benefits. Lack of knowledge about the program was also an important contributing factor.     

Fiscal Competition Among States in Australia: The Demise of Death Duties

This study examines interstate migration in Australia for theperiod 1972–1985 to determine if it was influenced byTiebout-style fiscal competition. In particular, it examinesthe impact of Queensland's abolition of death duties in themid-1970s. The evidence presented is consistent with the commonwisdom surrounding the event as well as with the Tiebout hypothesis.Interstate migration during this period appears to have beenin favor of Queensland and at the expense of those states thatdelayed following the Queensland example. Queensland's populationgrowth during the first three years after abolishing death dutieswas an average 0.20 percent higher due to migrants avoidingthe death duties of the other five states. On average, populationgrowth in each of these states was 0.04 percent lower as a resultof the tax.     

Purchasing power of U.S. Social Security benefits abroad, 1970-82

This article examines whether the small number of Social Security beneficiaries living abroad enjoy a higher standard of living than they would with the same benefits if they lived in the United States. The article addresses this question using two methods. First, absolute comparisons of U.S. dollar purchasing power abroad are made using "purchasing power parities," a method recently developed to allow international comparisons of real standards of living. Second, the effects of changes in Social Security benefit levels, exchange rates, and rates of inflation on the relative value of benefits abroad are measured. Both methods show considerable instability in purchasing power of Social Security benefits in the 1970's. Although beneficiaries in 1970 generally could live better abroad than in the United States, this advantage eroded considerably during the 1970's, followed by some improvement in 1981-82.     

Income of new retired workers by age at first benefit receipt: findings from the New Beneficiary Survey

Using data from the New Beneficiary Survey (NBS) of the Social Security Administration (SSA), this article examines how income sources and total monthly income received by newly retired social security beneficiaries vary with the age at which the first benefit check was received. The NBS respondents who received a first benefit at age 65 or older were better off economically than were those who received a first benefit at ages 62-64. At the time of the interview, 18-30 months after receiving a first benefit, these older beneficiaries had higher levels of total income and were more likely to have income from earnings and assets. Pension receipt rates did not vary by the age at which the first social security benefit was received except for married women retired workers, for whom the rate was higher at the older ages. The largest proportion of aggregate income (slightly more than one-third) was derived from social security benefits. More than 90 percent of the NBS Medicare-only respondents--a sample of nonbeneficiaries who were eligible for monthly cash benefits but had established their entitlement only for the purpose of enrolling in the Medicare program--reported earnings income. They had lower rates of pension receipt and higher rates of asset income receipt than the retired workers. The Medicare-only respondents had substantially higher incomes than did retired workers, and most of their aggregate income was from earnings. The NBS retirees were generally in better financial condition than a group of social security beneficiaries aged 65 or older from all benefit categories in the Current Population Survey Income Supplement with whom they were compared.     

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.     

Characteristics of the longest job for new retired workers: findings from the New Beneficiary Survey

This article describes the duration and type of employment, occupational and industrial classification, and pension coverage associated with the longest job ever held by new social security retired-worker beneficiaries and nonretired persons enrolled only for Medicare. The Medicare-only enrollees usually had their retired-worker benefits withheld because their earnings exceeded exempt amounts under the social security earnings test. They were more likely to be self-employed and to be in executive, administrative, managerial, or professional occupations. By contrast, new retired-worker beneficiaries closely resembled the general labor force with respect to occupation, industry, and employer type. Persons who claimed benefits before age 65 differed from older retirees in that they were more likely to be in service and blue-collar occupations and less likely to be self-employed. Both sexes increased their pension coverage between the late 1960's and the early 1980's. By the latter period, the majority of retired workers reported employee pension coverage and, of those covered, most received a monthly benefit. Fewer women than men indicated pension coverage. Married women who retired early were least likely to indicate pension coverage and, when covered, were more likely than other retirees to report the receipt of a lump sum payment in lieu of monthly payments.     

Educational and economic characteristics of student beneficiaries: black-white differences

This article compares black and white student beneficiaries under the old-age, survivors, and disability insurance (OASDI) program during the 1972-73 school year from the standpoint of differences in economic and educational characteristics. The role that OASDI played in enabling students to continue in school full time is studied. The findings show that relatively more blacks were in the student beneficiary population than in the general student population; they were also overrepresented among students attending high school. Blacks were disadvantaged with respect to the educational attainment of their fathers and in terms of total family income. They also had lower-grade-point averages and those in high school were older than their white counterparts. Black high school students nevertheless planned to continue their education and to attend 4-year colleges in about the same proportion as whites. The total amount of educational income of black students was greater than that of white students, but the members of the latter group received more from loans and miscellaneous sources. Grants were the most important source of educational income for blacks. About half the student beneficiaries said they could continue full time in school without benefits and a third said they could not.     

Lifetime distributional effects of Social Security retirement benefits

This article presents three measures of the distribution of actual and projected net benefits (benefits minus payroll taxes) from Social Security's Old-Age and Survivors Insurance (OASI) for people born between 1931 and 1960. The results are based on simulations with the Social Security Administration's Model of Income in the Near Term (MINT), which projects retirement income through 2020. The base sample for MINT is the U.S. Census Bureau's Survey of Income and Program Participation panels for 1990 to 1993, matched with Social Security administrative records. The study population is grouped into 5-year birth cohorts and then ranked by economic status in three ways. First, the population is divided into five groups on the basis of individual lifetime covered earnings, and their lifetime present values of OASI benefits received and payroll taxes paid are calculated. By this measure, OASI provides much higher benefits to the lowest quintile of earners than to other groups, but it becomes less redistributive toward lower earners in more recent birth cohorts. Second, people are ranked by shared lifetime covered earnings, and the values of shared benefits received and payroll taxes paid are computed. Individuals are assumed to split covered earnings, benefits, and payroll taxes with their spouses in the years they are married. By the shared covered earnings measure, OASI is still much more favorable to persons in the lower income quintiles, although to a lesser degree than when people are ranked by individual covered earnings. OASI becomes more progressive among recent cohorts, even as net lifetime benefits decline for the entire population. Finally, individuals are ranked on the basis of their shared permanent income from age 62, when they become eligible for early retirement benefits, until death. Their annual Social Security benefits are compared with the benefits they would have received if they had saved their payroll taxes in individual accounts and used the proceeds to buy either of two annuities that provide level payments from age 62 until death: a unisex annuity that is based on the average life expectancy of the birth cohort or an age-adjusted annuity that is based on the worker's own life expectancy. On the permanent income measure, OASI is generally more favorable to people in higher income quintiles. Moreover, it is particularly unfavorable to those in the lowest quintile. Because people in the lowest quintile have a shorter life expectancy, they receive OASI benefits for a shorter period. This group would receive greater benefits in retirement if they invested their payroll taxes in the age-adjusted annuity. OASI is more favorable to them than the unisex annuity, however, OASI is becoming more progressive in that the net benefits it provides drop more rapidly among higher income quintiles than lower ones. This article also examines how OASI affects individuals by educational attainment, race, and sex. On both the lifetime covered earnings and the permanent income measures, OASI is more favorable to workers with less education and more favorable to women. The results by race and ethnicity are mixed. When people are ranked by the present value of their shared lifetime covered earnings, OASI appears more favorable to non-Hispanic blacks and Hispanics than to non-Hispanic whites. When people are ranked by shared permanent income in retirement, however, OASI produces negative returns for both non-Hispanic blacks and non-Hispanic whites in the most recent birth cohorts, with non-Hispanic blacks faring relatively worse. The changes across cohorts occur partly because of changes in tax rates and benefits, but more importantly because of changing demographics and earnings patterns of the workforce. Of particular importance is the increasing share of beneficiaries who receive worker benefits instead of auxiliary benefits as wives or widows. OASI benefits are based on the lifetime covered earnings of current or former married couples, as well as on earned retirement benefits of individuals. The reduced importance of auxiliary benefits (due to the higher lifetime covered earnings of women) and the increased proportion of divorced retirees make OASI more progressive--even as net benefits decline--for current and future cohorts than for cohorts who retired in the 1990s. Analysis of these findings suggests that simulations of policy changes in Social Security must take into account the decreasing importance of auxiliary benefits across birth cohorts and the complex changes in individuals' marital histories.     

The Effects of Green Cards on the Wages and Innovations of New PhDs

Visa policies in the United States restrict job opportunities and job mobility for U.S.‐trained PhDs who hold a temporary visa, a group that accounts for 40 percent of newly graduated PhDs in science and engineering. The Chinese Student Protection Act of 1992 (CSPA) allowed Chinese students to be eligible for permanent residence in the United States. Many CSPA beneficiaries, Chinese students who became permanent residents, did not pursue postdoctoral training and instead entered the public or private sector directly. This supply shift increased the relative wage of native postdocs to non‐postdocs. Four to eight years after graduation, CSPA beneficiaries earned 9 percent more than the comparison group, were less likely to work in academia, published fewer research articles, and produced more patents.     

Longitudinal outcomes of an early cohort of Ticket to Work participants

Using 2004-2006 National Beneficiary Survey data matched to Social Security administrative data, we follow a cohort of disability beneficiaries participating in the Ticket to Work (TTW) program for several years to assess changes in their service use, health status, employment, and income. About 20 percent of TTW participants achieved employment at levels that would significantly reduce their disability benefits. Another 40 percent achieved some employment success, but the remaining 40 percent reported no earnings during 2003-2005. Use of TTW support services during 2003-2005 was modest. Many participants experienced significant changes in their health status across survey rounds, which might have affected their ability to actively participate in TTW and to become employed. Many also experienced significant employment and income instability. The findings suggest that employment among TTW participants was associated with reduced poverty.