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How policy variables influence the timing of applications for Social Security Disability Insurance.
R V Burkhauser1, J S Butler, R R Weathers
1Department of Policy Analysis and Management, Cornell University, USA.
Social Security Bulletin
|November 14, 2002
Summary
Workers with work-limiting health conditions often delay applying for Social Security Disability Insurance (DI) benefits. Employer accommodations significantly slow DI application timing, while higher state DI allowance rates accelerate it.
Area of Science:
- Socioeconomics
- Public Policy
- Labor Economics
Background:
- Workers with work-limiting health conditions face decisions regarding applying for Social Security Disability Insurance (DI) benefits.
- The timing of DI applications is influenced by various factors, including health status and institutional variables.
- Most workers do not apply for DI benefits immediately upon experiencing a work-limiting health condition.
Purpose of the Study:
- To analyze the impact of policy variables—employer accommodations, state DI allowance rates, and DI benefits—on the timing of DI benefit applications.
- To determine how these policy variables influence the decision-making process for workers with health conditions affecting their ability to work.
- To quantify the effects of accommodations and state allowance rates on the speed of DI application.
Main Methods:
- Utilized a rich dataset combining personal and employer characteristics from the Health and Retirement Study linked to Social Security administrative records.
- Employed kernel density estimates to analyze the distribution of applications based on state allowance rates.
- Applied life-table analysis and hazard modeling to assess the influence of employer accommodations and state allowance rates on DI application timing.
Main Results:
- The median man waits 7 years and the median woman waits 8 years to apply for DI benefits after a work-limiting condition begins.
- Workers in states with higher DI allowance rates are more likely to apply sooner, while those receiving employer accommodations apply significantly later.
- Universal accommodations could delay applications by approximately 3.7-4.3 years, whereas a 20% decrease in state allowance rates would delay applications by 0.8-1.4 years.
Conclusions:
- Policy variables, specifically employer accommodations and state DI allowance rates, significantly influence the timing of DI benefit applications.
- The social environment and institutional factors play a crucial role in the decision for workers with work-limiting health conditions to apply for DI benefits.
- Employer accommodations appear to be a more potent factor in delaying DI applications compared to changes in state allowance rates.