The Effect of the Supplemental Security Income Children’s Program on Parental Labor Supply and Long-Term Outcomes of Enrolled Children

by Manasi Deshpande, Massachusetts Institute of Technology

Supplemental Security Income (SSI) enrollment among children under age 18 has surged in recent decades, reaching 1.2 million in 2010. An increasing proportion of children are enrolled with mental diagnoses that are difficult to verify. Despite the surge in enrollment, little is known about the SSI children’s program with respect to consumption smoothing, moral hazard, or the long-term educational and employment outcomes of enrolled children.

I propose studying the effect of the SSI children’s program on parental labor supply and on the long-term educational and earnings outcomes of enrolled children. I would use two instruments to identify this effect: 1) continuing disability reviews (CDRs) as an instrument for being terminated from the SSI program, and 2) disability examiner allowance rate as an instrument for being accepted to the SSI program. Together, these two instruments would create three groups of interest: children who never get on SSI, children who get on SSI and leave the program before age 18, and children who get on SSI and stay on until at least age 18. In addition to parental labor supply response, I would compare earnings outcomes, transfer payment receipt, and educational outcomes across these groups to identify the effect of the SSI program.

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