“Do Stronger Employment Discrimination Protections Decrease Reliance on Social Security Disability Insurance? Evidence from the Social Security Reforms” (with Patrick Button)

Abstract

The Social Security Amendments of 1983 (SSA1983) increased the full retirement age (FRA) and increased penalties for retiring before the FRA. This caused spillover effects on Social Security Disability Insurance (SSDI) applications and receipt by making SSDI relatively more generous at a given age for certain birth-cohorts, which we document in this paper. We then explore if stronger disability and age discrimination laws moderated these spillovers. We use variation in state disability and age discrimination laws, whereby many state laws are broader or stronger than federal law. We estimate the effects of broader and stronger discrimination laws on SSDI applications and receipt using a difference-in-differences framework, comparing affected cohorts, aged 50 to 64, to similarly-aged unaffected cohorts, across states. We find that a broader definition of disability, based on medical diagnosis, significantly reduces SSDI applications induced by SSA1983. We find weaker evidence that other broader or stronger features of state disability discrimination laws also reduce SSDI applications. These results are larger and more statistically significant for women. We do not find much evidence that age discrimination laws reduce spillovers, and we find few effects on SSDI receipt for any laws. These results suggest that broader and stronger disability discrimination laws reduce employment barriers, allowing older individuals to work longer, possibly reducing reliance on SSDI and costly applications to SSDI.

Publications

• Khan, Mashfiqur R. 2018. “The Effect of the Disability Insurance Application Decision on the Employment of Denied Applicants.” American Economic Association Papers and Proceedings, 108: 267-71.
• Khan, Mashfiqur R. and Mohammad A. Razzaque. 2011. “Children’s Well-being and Boy-Girl Discrimination in Intra-household Resource Allocation,” in Mohammad A. Razzaque, Bazlul H. Khondker, and Selim Raihan ed. Poverty, Intra-Household Distribution and Gender Relations in Bangladesh: Evidence and Policy Implications, UPL: Dhaka, Bangladesh.

Working Papers

• Khan, Mashfiqur R., Matthew S. Rutledge, and Geoffrey Sanzenbacher. “Social Security and Total Replacement Rates in Disability and Retirement”, Working Paper 2017-6. Chestnut Hill, MA: Center for Retirement Research at Boston College, May 2017.
• Belbase, Anek. Mashfiqur R. Khan, Alicia H. Munnell, and Anthony Webb. “Slowed or Sidelined? The Effect of “Normal” Cognitive Decline on Job Performance Among the Elderly”, Working Paper 2015-12. Chestnut Hill, MA: Center for Retirement Research at Boston College, June 2015.
• Khan, Mashfiqur R., Matthew S. Rutledge, and April Yanyuan Wu. “How Do Subjective Longevity Expectations Influence Retirement Plans?” Working Paper 2014-1. Chestnut Hill, MA: Center for Retirement Research at Boston College, January 2014.
• Coe, Norma B., Mashfiqur R. Khan, and Matthew S. Rutledge. “Sticky Ages: Why is Age 65 Still A Retirement Peak?” Working Paper 2013-02. Chestnut Hill, MA: Center for Retirement Research at Boston College, January 2013.

Manuscripts, In Progress

• Khan, Mashfiqur R. “Effectiveness of Labor Demand Side Policy in Lowering Dependence on Disability Insurance: Case of Disability Discrimination Laws.”
• Khan, Mashfiqur R. and Nora Lustig. “A Fiscal Incidence Analysis for Bangladesh.”
• Khan, Mashfiqur R. and Matthew S. Rutledge. “How Do Denied SSDI Applicants Make Ends Meet?”
• Khan, Mashfiqur R. “The Effect of the Disability Insurance Application Decision on the Employment of Denied Applicants.”

Issue Briefs

• Khan, Mashfiqur R., Matthew S. Rutledge, and April Yanyuan Wu. “Do Longevity Expectations Influence Retirement Plans?” Issue in Brief 14-6. Chestnut Hill, MA: Center for Retirement Research at Boston College, March 2014.
• Coe, Norma B., Mashfiqur R. Khan, and Matthew S. Rutledge. “How Important is Medicare Eligibility in the Timing of Retirement?” Issue in Brief 13-7. Chestnut Hill, MA: Center for Retirement Research at Boston College, May 2013.