Indiana University SPEA Edward J. Bloustein School of Planning and Public Policy University of Pennsylvania AIR American University

Panel Paper: Effectiveness of the Offset for Beneficiaries Most Motivated to Work: Short-Run Results from Bond's Stage 2 Experiment

Friday, November 13, 2015 : 9:10 AM
Orchid A (Hyatt Regency Miami)

*Names in bold indicate Presenter

Judy Geyer, Stephen Bell and Daniel Gubits, Abt Associates
The Benefit Offset National Demonstration (BOND) experiment is designed to test the effect of a benefit offset on earnings and SSDI benefit payments. Under the benefit offset, SSA reduces SSDI payments by $1 for every $2 earned for beneficiaries who earn above the substantial gainful activity (SGA) limit for more than a year, rather than suspending or terminating benefits entirely. Stage 2 of the BOND experiment tests the efficacy of the benefit offset with and without the availability of enhanced work incentives counseling for beneficiaries believed to be likely to take advantage of the offset–informed and consented volunteers. Five percent of solicited SSDI beneficiaries volunteered to participate in the experiment and demonstration staff randomly assigned them into three groups: (i) beneficiaries eligible for the benefit offset, (ii) beneficiaries eligible for the benefit offset plus enhanced work incentives counselling, and (iii) a control group of beneficiaries subject to the current law. 

This study presents the effects of the offset—with and without enhanced work incentives counseling—compared to current law over the first two years of the demonstration, including impacts on employment, earnings, and benefits received for all volunteers and for subsets defined by length of benefit receipt. First, the paper contrasts the background characteristics of volunteers with the population of all SSDI beneficiaries. Next, the paper describes the uptake of enhanced work incentive counseling, a distinctive feature of BOND Stage 2. Finally, findings show small but statistically significant increases in earnings over the short run. The study concludes with lessons learned regarding implementation of a BOND-style intervention and a preview of the long-run research agenda for the Stage 2 experiment, which will include a more in-depth examination of offset utilization and counselling, as well as a social benefit-cost analysis of this policy strategy.