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Workplace Injuries and Receipt of Benefits from Workers Compensation and SSDI*

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Abstract

We use data from the Health and Retirement Study (HRS) and matched Social Security Administration (SSA) data to study two questions. First, we examine evidence on whether workers who suffer permanently disabling injuries covered by workers’ compensation (WC) subsequently end up on Social Security Disability Insurance (SSDI). Second, under some conditions, SSDI benefits are supposed to be reduced for workers receiving WC benefits (“offsets”). Offsets are most relevant for workers with WC-compensable, permanently disabling injuries. Our analysis captures data on WC benefit receipt from the HRS and links it to SSA data on WC and SSDI recipients. We find that SSA appears to be missing data on WC benefits for a sizable share of WC-benefit recipients, and that the frequency of SSDI benefit reduction because of the WC offset seems surprisingly low.

Key Findings

  • A large share of workers who suffer permanently-disabling injuries covered by workers’ compensation (WC) end up on Social Security disability insurance (DI): 31% based on self-reported data in the Health and Retirement Study and 50% based on combined HRS and SSA administrative data.
  • SSA appears to be missing information on a sizable share of WC-benefit recipients for which SSDI offsets could potentially be applied (31% to 35%, depending on the precise data used). Moreover, based on SSA data, the frequency with which SSDI benefits are reduced because of the WC offset seems surprisingly low (33%) — at least based on the information we have.

Citation

Citation
Ladd, Daniel, and David Neumark. 2021. “Workplace Injuries and Receipt of Benefits from Workers’ Compensation and Social Security Disability Insurance.” Ann Arbor, MI. University of Michigan Retirement and Disability Research Center (MRDRC) Working Paper; MRDRC WP 2021-424. https://mrdrc.isr.umich.edu/publications/papers/pdf/wp424.pdf

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Project

Paper ID

WP 2021-424

Publication Type

Working Paper

Publication Year

2021