Association for Public Policy Analysis & Management

The Social Security Amendments of 1983, which increased the full retirement age, have created considerable spillover effects on Social Security Disability Insurance (SSDI) applications and enrollment by making SSDI more generous at a given age for certain birth-cohorts. We explore if stronger disability discrimination laws moderate the spillover effects of these amendments on SSDI. Exploiting the state-level variations in the degree of protections against disability discrimination, we estimate the effects of stronger disability discrimination laws on SSDI applications and enrollment using a difference-in-difference framework. We use data from the Health and Retirement Study (HRS) merged with the Social Security Administration (SSA) administrative Form-831 disability records and SSA restricted geographic identification data to estimate the econometric models. Most of the Social Security reforms are intended to increase employment and delay Social Security retirement benefit claiming among older individuals to achieve the program’s financial solvency in the long-run. However, part of the reduction in spending for Social Security retired worker benefits in the short-run through these reforms may be offset by the spillover effects on SSDI through an increase in spending on disabled worker benefits. The findings of this paper will provide evidence of the effectiveness of to what extent disability discrimination protections reduce employment barriers and thus reduce reliance on SSDI.