The Effect of the Disability Insurance Application Decision on the Employment of Denied Applicants

摘要

The literature focused on the interactions between social insurance programs and labor force participation (LFP) mostly analyzes the causal effect of benefits receipt of the Social Security Disability Insurance (SSDI). In these studies, denied applicants are of interest primarily as a control group. Bound (1989) pioneers the empirical approach of using the labor supply of denied SSDI applicants to estimate an upper bound on the potential labor supply of accepted applicants.In the analytical approach of comparing the employment of accepted and denied SSDI applicants, there is an implicit assumption that the SSDI affects employment through the single causal pathway of receiving benefits. If the decision to go through the process of application itself affects the applicants-both the awarded and the denied-the negative effects of application on denied applicants is unaccounted for in such analysis. In this paper, I estimate the causal effect of the SSDI application on the labor supply of denied SSDI applicants.