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Tracking the Household Income of SSDI and SSI Applicants
by John Bound, Richard V. Burkhauser and Austin Nichols
WP 2001-009
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Using panel data from the Survey of Income and Program Participation linked to Social
Security Administration disability determination records we trace the pattern of household income
and the sources of that income from 38 months prior to 39 months following application for Social
Security Disability Insurance (SSDI) and Supplemental Security Insurance (SSI). We find that the
average applicant’s labor earnings declines dramatically beginning six month before application but
the average applicant’s household income drops much less dramatically both in the months just
before or just after application and over the next three years, and does so even for those denied
benefits. However, we also found substantial heterogeneity in household income outcomes in both
the SSDI and SSI applicant population. Our quantile regressions suggest that higher income
households experience greater percentage declines in their post-application income. Such results are
consistent with the lower replacement rate for higher earners established in the SSDI program and the
low absolute level of protection provided to all SSI applicants regardless of income prior to
application.
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