Association for Public Policy Analysis & Management

Applying for Social Security Disability Insurance (SSDI) is a time-consuming and burdensome process. Applicants must complete complicated paperwork and submit extensive personal information, including medical documentation and a detailed description of work history.  While the SSDI application process is intended to determine disability status effectively, the difficulty in completing it may also discourage some eligible individuals from applying for benefits. In this paper, we analyze how application and acceptance to SSDI were affected by an innovation that reduced these application costs. 

We take advantage of a revision to the online application in 2009, called iClaim, which significantly decreased the transaction costs of submitting an SSDI application online. Prior to the 2009 revision, the majority of SSDI applications were filed in person at a local field office. Online applications increased dramatically following the change, from 15 percent of applications in 2008 to 23 percent just a year later, and more than 50 percent by 2014. The decrease in cost likely increased the volume of applications, but also likely affected the composition of the applicant pool in terms of the type and severity of disability. 

Using county-level data that we obtained from the Social Security Administration, we use a difference-in-differences strategy to compare SSDI applications, acceptances and appeals before and after 2009 across counties that experienced larger and smaller reductions in the costs of applying to SSDI due to this innovation.

We examine how application rates changed across counties with varying degrees of residential internet connectivity, measured by data from the Federal Communication Commission. Our analyses reveal that while better access to the online application led to a small increase application rates, there is a significantly lower award rate in areas with better internet access after the online application change. We also examine heterogeneity in this result by age and local economic conditions. These results suggest that increased online access could lead to compositional changes in the SSDI applicant pool, increasing the relative share of marginal applicants.

This research provides evidence of the importance of considering the non-monetary costs of obtaining government benefits, and how these effects may differ across local communities and geography.