Jan 5, 2014

Does This Explain Some Of The Increase In Disability Claims?

     The abstract of a study by Philip Armour of Cornell University:
This paper uses survey data matched to administrative records to measure the effect on Disability Insurance [DI] application behavior of a natural experiment in the provision of Social Security benefit information. I find that receipt of the Social Security Statement [Personal Earnings and Benefit Estimate Statement or PEBES], a document gradually introduced in the 1990s which contained personalized information on DI insurance-status and potential benefit, had a positive, substantial, and statistically significant effect on DI application rates of the Health and Retirement Study sample. This increased likelihood of application by 0.84 of a percentage point per two-year period, which is a 62% increase over the base rate. This overall effect was driven by a large increase in the rate of application among those reporting a work-limiting condition and who were previously not employed. The non-work-limited population experienced a small decrease in their DI application rates, suggesting that provision of the Statement increased self-sorting efficiency among potential applicants. Furthermore, my analysis shows no evidence of applicants merely "shifting forward" their DI application after Statement receipt; instead, the estimated increase appears to be new applicants. In the absence of these new applicants, the 32% growth rate of the per-capita DI rolls from 1995-2004 would have been approximately 25%. These results provide a novel explanation for a large portion of the marked rise in DI rolls since the 1990s as well as indicate the importance of the information environment in social program application decisions more broadly.

1 comment:

Anonymous said...

Would this have anything to do with Astrue's decision to stop providing the annual statement by mail?