Effect of substantial gainful activity level on disabled beneficiary work patterns

Area of Science:

• Social Security research
• Disability policy analysis
• Labor economics

Background:

• Analysis of disabled beneficiaries' earnings records over a 15-year period.
• Examination of the substantial gainful activity (SGA) level's impact on earnings.
• Trends in beneficiary recovery rates and employment patterns.

Purpose of the Study:

• To examine the flow of disabled-worker beneficiaries through the disability program.
• To analyze work history and earnings patterns in relation to the SGA level.
• To assess the effectiveness of the SGA level as a work incentive.

Main Methods:

• Analysis of 1-percent Continuous Work History Sample data for disabled beneficiaries.
• Longitudinal study covering a 15-year period with multiple SGA level changes.
• Examination of beneficiary earnings, employment status, and program participation.

Main Results:

• Increases in the SGA level (1966, 1968, 1974) did not lead to higher beneficiary earnings.
• Approximately 10% of beneficiaries were employed, with only 3% earning above the SGA level.
• Median annual earnings remained consistently below $1,000, irrespective of SGA level.

Conclusions:

• The SGA level has not functioned as an effective work incentive for disabled beneficiaries.
• Policy considerations regarding SGA level changes should not focus on marginal employment.
• Controlling program growth may depend more on the allowance process than benefit termination for work recovery.