Induced Entry into the SSDI Program: Using SGA Changes as a Natural Experiment

Published: 2011
Project ID: UM11-Q1


The fraction of American adults receiving benefits from the Social Security Disability Insurance program (SSDI) has risen dramatically during the past several decades. A proposed solution to rising caseload costs consists of changing program rules to encourage fully or partially recovered SSDI beneficiaries to return to work. While introducing a benefit offset could generate savings from increased labor supply, earnings, and program exit rates of current SSDI beneficiaries, it could also create unintended costs if the more generous work rules induce significant numbers of working individuals to apply for benefits. In this project we propose to study how past changes in a closely related program parameter, the Substantial Gainful Activity (SGA) threshold, have affected applications and enrollment rates in order to assess the magnitude of potential induced entry effects arising from a benefit offset.