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Do Stronger Employment Discrimination Protections Decrease Reliance on Social Security Disability Insurance? Evidence
Patrick Button1, Mashfiqur R Khan2, Mary Penn3
1Department of Economics, Tulane University, NBER, and IZA.
Journal of the Economics of Ageing
|May 23, 2022
Summary
State disability laws requiring only medically diagnosed conditions and allowing more damages significantly reduced Social Security Disability Insurance (SSDI) applications following federal retirement age changes. Age discrimination laws did not moderate SSDI effects.
Area of Science:
- Economics
- Public Policy
- Labor Law
Background:
- The 1983 US Social Security Amendments raised the retirement age and penalties for early retirement.
- This policy change indirectly increased the generosity of Social Security Disability Insurance (SSDI), potentially leading to more applications.
Purpose of the Study:
- To investigate whether state-level disability and age discrimination laws moderated the increase in SSDI applications and receipts.
- To examine the impact of variations in state law stringency compared to federal regulations.
Main Methods:
- Employed a difference-in-differences approach to estimate the effects of state laws.
- Utilized variation in state laws being broader or stronger than federal protections.
Main Results:
- Broader state disability definitions (requiring only medically diagnosed conditions) and stronger state disability discrimination laws (allowing more damages) significantly reduced SSDI applications and receipts.
- Some state disability law features were associated with increased employment, particularly for women.
Conclusions:
- State disability laws play a crucial role in mitigating unintended consequences of federal retirement policy changes on disability insurance uptake.
- While age discrimination laws showed some positive employment associations, they did not significantly moderate SSDI trends.
Keywords:
Age Discrimination in Employment ActAmericans with Disabilities ActDisabilityH55J14J26J71J78K31Social SecuritySocial Security Amendments of 1983agingdisability insurancediscriminationemployment lawMore Related Videos
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