Does Delay Cause Decay? The Effect of Administrative Decision Time on the Labor Force Participation and Earnings of Disability Applicants
By David H. Autor, Nicole Maestas, Kathleen J. Mullen, Alexander Strand. Social Science Research Network, 2015
131 citations recorded by the source corpus.
An influential body of research studies the labor supply and earnings of denied Social Security Disability Insurance (SSDI) applicants to estimate the potential employment and earnings of those awarded benefits. This research design implicitly treats employability as a stable applicant attribute that is not directly impacted by the process of applying for SSDI benefits. If, plausibly, applicants’ employment potential deteriorates while they are out of the labor force, then the labor force participation of denied applicants -- who spend an average of 10 months seeking benefits -- may understate their employment potential at the time of application. This paper tests whether the duration of SSDI applications causally affects applicants’ subsequent employment. We use a unique Social Security Administration workload database to identify exogenous variation in applicants’ initial decision times induced by differences in processing speed among the disability examiners to which they are randomly assigned. This variation significantly affects applicants’ total processing time but, importantly, is uncorrelated with their initial award and denial outcomes. We find that longer processing times reduce the employment and earnings of SSDI applicants in the years after their initial decision. A one standard deviation (2.4 month) increase in initial processing time reduces annual employment rates by 1 percentage point (3.2%) in years two, three and four post-decision. Extrapolating these effects to total applicant processing times, we estimate that the SSDI determination process directly reduces the post-application employment of denied applicants by approximately 3.6 percentage points (7%) and allowed applicants by approximately 5.2 percentage points (33%).
Subfields: Demography, Economics and Econometrics, Safety Research
View Paper: https://www.semanticscholar.org/paper/1030e53776606c6f1d53f28797358c0144b61719
How researchers see this paper
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In Demography
In Economics and Econometrics
- Till M. von Wachter
- Johannes F. Schmieder
- Arash Nekoei
- Stefan Bender
- Andrea Weber
- Nathaniel Hendren
- Gregor Jarosch
In Safety Research
Citations in the corpus
- The Effect of Unemployment Benefits and Nonemployment Durations on Wages (2016, methodology): “Using a direct instrument for nonemployment durations, Autor et al. (2015) find somewhat larger percentage effects of nonemployment duration for SSDI ap-”
- The effect of disability insurance receipt on labor supply (2014, unknown): “During that period, human capital may depreciate (Autor et al. (2011)).”
- Does Extending Unemployment Benefits Improve Job Quality? (2017, background): “For related empirical evidence, see Kroft et al. (2013), Autor et al. (2013), and Kudlyak et al. (2013).”