Retirement and Disability Research Consortium

Abstract

This project will survey recent retirees and workers approaching retirement to find out why, despite the availability of SSA’s online resources, a large proportion of beneficiaries continue to claim with the help of a representative. SSA has an interest in information that could help the agency expand its capacity to effectively serve its customers through greater use of online services – especially if COVID-19 continues to limit other services.

Retiring baby boomers are increasing the demand for SSA’s services at a time when budget constraints and retiring staff are limiting its capacity to deliver these services (Curda 2018). In theory, investing in web-based tools that people can use to serve themselves could help SSA meet the projected increases in demand, even with fewer staff (Osterweil, Millett, and Winston 2007). But, despite investments in tools with significant labor-saving potential, such as online claiming, usage of these tools has stalled since 2012 (U.S. Social Security Administration 2020a). This project will help SSA better understand why usage has stalled, and assess the extent to which different approaches, such as increased outreach, new features, or improvements to data quality could increase future use.

Abstract

This project will conduct an online survey experiment to gauge how communications from the media and policy communities affect the public’s understanding of actuarial projections. SSA has an interest in this question because miscommunication could affect claiming behavior and retirement preparedness. Most immediately, this project will test whether a simple alteration to SSA’s current communications could improve understanding. Because of the COVID-19 crisis, the survey would be conducted no earlier than March 2021.

The 2019 Trustees Report projects that the OASI trust fund will be depleted in 2034, at which point revenues will decline until they cover about 75 percent of scheduled OASI benefits. To communicate this projection, the summary of the Trustees Report describes “long-term financing shortfalls” under currently scheduled benefits and financing. Yet, news coverage of the Trustees Report often emphasizes the depletion date and de-emphasizes the limited nature of benefit cuts. This emphasis could lead the public to believe that all future benefits are insecure. If workers act on such misperceptions, they might claim benefits earlier or save more for retirement than they would if they felt confident about future benefits.

Abstract

This project will use the American Community Survey (ACS) and Decennial Censuses to estimate the moderating effect of Social Security benefits on local economies during recessions and how much of that protection comes from the size of the beneficiary population and how much from the variation in Social Security replacement rates due to the variation in earnings. SSA has an interest in this question because the Social Security program may have an underappreciated macroeconomic value, which may decline if benefits are reduced when the trust fund is depleted.

Large literatures examine the insurance value of Social Security to individuals and the macroeconomic stabilization provided by various government programs. However, very limited research looks into the macroeconomic benefits of Social Security as a moderator of business cycles. Intuitively, if many people are insulated from recessions through stable Social Security income, they will continue to spend, propping up local employment in the face of declines in labor demand. As the U.S. faces a recession brought on by COVID-19, SSA has an interest in knowing how Social Security benefits may help counter a decline in aggregate demand.

Abstract

This project will use the Public Plans Database (PPD) linked to the Census of Governments and the Pension Legislation Database to assess how COVID-19 is affecting the financial health and benefit generosity of state and local pensions whose members are not covered by Social Security. SSA has an interest in this question because if these pensions – known as FICA replacement plans – are under severe financial stress, they may not be able to provide Social Security-equivalent benefits as required by the Employment Tax Regulations.

Federal law allows certain state and local employees to be excluded from Social Security if they are covered by an employer pension of sufficient generosity. Even before the COVID-19 crisis, some FICA replacement plans were at risk of non-compliance due to benefit cuts in the wake of the 2008 financial crisis (Quinby, Aubry, and Munnell 2018). The current crisis has compounded the pressure on governments to reduce benefits, and has raised the specter of asset exhaustion for severely underfunded plans. This study will document the impact of the COVID-19 crisis on plan finances, investigate the likelihood of future benefit cuts, and estimate the probability that uncovered plans will exhaust their assets before 2030.

Abstract

This project will identify geographic “hot spots” where the prevalence of certain primary impairments among DI and SSI awardees is substantially above average. The results will inform SSA’s understanding of geographic variation and trends in program awards. The analysis will leverage a public-use file that is currently being developed as part of BC20-06 that will include information on the primary impairments of DI and SSI awardees at the level of the U.S. Census Bureau Public Use Microdata Areas.

Previous work has documented substantial geographic variation in DI and SSI receipt, and a separate strand of literature has considered trends in disabling conditions among beneficiaries. Less is known, however, about the extent of geographic variation in disabling conditions.

Abstract

The proposed project combines publicly available nutrition data from Feeding America, demographic and economic data from Census’s American Community Survey, and the administrative InfoGroup Business Data to examine DI receipt and food insecurity and how access to affordable and healthy food helps shape that relationship. This topic is important to SSA because 14 million households cannot afford adequate nutrition, and many of them include one or more adults with disabilities who depend on DI to maintain their economic and physical well-being. The lack of food access may limit DI’s effectiveness.

Abstract

This project will map the relationship between child SSI participation and measures of local community deprivation using administrative data from the Supplemental Security Record and the Health Resources and Services Administration’s Area Deprivation Index. This research will be useful to SSA in assessing the relationship between SSI participation and deprivation.

We will examine the relationship at the county level of SSI participation and economic deprivation. For example, areas that have low rates of SSI participation and high rates of deprivation are potential areas where SSA could fulfill its statutory responsibility of conducting outreach. Conversely, areas that have high rates of SSI participation and low rates of deprivation are candidates for better understanding why some areas rely on SSI more than others. We will also conduct case studies in census tracts, focusing on high deprivation and low SSI participation that are candidates for potential outreach efforts.

Abstract

This project will assess the accuracy of self-reports of applications to and receipt of DI and SSI using data from the Health and Retirement Study (HRS) linked to SSA administrative records. The findings will help SSA better understand the advantages and limitations of using HRS self-reported and administrative data for disability policy research.

The HRS is the preeminent data source for research on the financial decision-making of older adults, but it has been underused for disability policy research (Schimmel Hyde and Stapleton 2017). The rich HRS data are matched to longitudinal SSA administrative records, which together offer a unique option for analyzing benefit claiming decisions and beneficiary outcomes. Thus, underuse of the HRS for disability research represents a missed opportunity.

Abstract

This project will study the experiences of the 2008 cohort of first-time DI beneficiaries who were at risk for work-related overpayments from award through 2018 using data from SSA’s Disabled Beneficiaries and Dependents files, Disability Analysis File, and Master Earnings File. The results will inform SSA’s understanding of the trajectories that lead beneficiaries to overpayments, which could identify mitigation strategies.

To date, limited information is available on work-related overpayments, such as the total amount and duration of overpayments and the average characteristics of overpaid beneficiaries. Previous research documents that more than 70 percent of beneficiaries at risk of a work-related overpayment were overpaid in a three-year window (Hoffman et al. 2019). However, experiences and trajectories presumably vary across beneficiaries and understanding common pathways may help identify points of intervention that could prevent overpayments.

Abstract

SSI and DI beneficiaries who work, particularly those who work above the substantial gainful activity (SGA) level, are at risk of having their benefits suspended retroactively and as a result being overpaid. Little is known about the extent to which beneficiaries anticipate these events, or their employment responses after experiencing them. This study will produce the first statistics on the extent to which a representative sample of beneficiaries who return to work at the SGA level understand the rules well enough to anticipate such events or are caught by surprise, and how they react. These findings will help SSA better understand the causes of overpayments and beneficiaries’ knowledge of disability program work incentives, which could aid any efforts to curb overpayments and promote work.

Abstract

This project will use data from SSA’s Disability Analysis File and Master Earnings File to document trends in labor market outcomes and return to DI or SSI following termination of DI benefits. The results will be useful to SSA in: 1) informing potential interventions to promote self-sufficiency and reduce return to disability benefit entitlement; and 2) anticipating potential outcomes of proposed legislative changes.

Prior research suggests that beneficiaries terminated for medical improvement have limited earnings following termination and may return to SSA disability programs. However, that research focused on benefit terminations through 2008 and did not include termination for employment. We will add to the existing literature by identifying DI beneficiaries whose benefits were terminated for medical improvement or employment in 2001-2018 and track the outcomes of those terminated by 2013 in the first 5 years following termination. The years after 2008 are of special interest because of the recovery following the Great Recession and because of changes in the composition of the DI caseload since that time.

Abstract

Much of the disagreement over households’ retirement preparedness hinges on how they adjust their consumption when kids leave home. SSA has an interest in consumption and savings behavior over the life-cycle as it directly impacts retirement resources.

Optimal savings studies, in which household consumption declines when kids leave home, suggest that people are saving optimally. On the other hand, studies based on the assumption of steady consumption over the working years conclude that many households will end up unprepared for retirement. A number of empirical studies have found that household consumption does decrease when the kids leave. Yet, an analysis of tax records show these same households do not increase their retirement savings (Dushi et al. 2015). If households are both consuming less but not saving more after their kids leave home, where are the resources going?

Abstract

The life-cycle model, under certain assumptions, predicts a stable consumption path in retirement. Consistent with this model, Social Security provides steady inflation-adjusted benefits, and financial planners and researchers often assume that retirees would like to maintain their pre-retirement standard of living. However, several studies suggest that retired households decrease their consumption over time, while others indicate consumption increases as retirees age and pay more for health care. Desired consumption patterns are of direct interest to SSA because they have implications for the adequacy and appropriate indexation of benefits in retirement.

This project will use the Health and Retirement Study to address three shortcomings of the existing literature: 1) the short time period and/or small sample size of household consumption data; 2) the combining of constrained and unconstrained households, which makes it impossible to separate necessity from preferences; and 3) the failure to account for survival bias, whereby only long-lived low-consuming households are alive at older ages. The question is what consumption pattern emerges after adjusting for these shortcomings.

Abstract

This project uses data from the restricted Health and Retirement Study to examine what the drawdown pattern of wealth in retirement implies about the sufficiency of OASI benefits. SSA has an interest in understanding whether limited drawdown by past cohorts of retirees has implications for the sufficiency of future cohorts’ benefits.

Past studies found limited drawdown by households soon after retirement. While this evidence might imply that OASI benefits were more than sufficient to fund the consumption of past retirees, this conclusion may not hold for two main reasons, particularly for future cohorts. First, cohorts studied in the past predominantly had defined benefit pensions, and thus had little need to draw down assets; in contrast, future cohorts will have primarily saved in defined contribution plans. Second, even past cohorts may have been reserving assets for late-life expenses, primarily long-term services and supports.

Abstract

This project will use the Health and Retirement Study, the National Health and Aging Trends Study, and the National Study of Caregivers to describe the risk that the potential need for long-term services and supports (LTSS) poses to different types of retirees and their caregivers. SSA has an interest in this project for two reasons. First, retirees whose need for support exceeds their resources could jeopardize their own or their caregivers’ retirement security – formal support can deplete financial assets meant to last their lifetime, and informal support can disrupt their caregivers’ careers. Second, even retirees with sufficient resources to meet their likely LTSS needs could benefit from knowing that they could spend more of their assets to supplement income from Social Security instead of holding on to them out of misplaced fear.

This project will compare the LTSS needs that retirees typically experience to the resources that they typically have in a way that makes it easier for households and policymakers to understand which retirees are likely to face a manageable burden and which ones are not.

Abstract

The share of Americans who hold debt and their level of indebtedness has increased substantially in recent decades, and older adults are no exception. While debt, if used judiciously, can improve financial well-being, excessive debt can have deleterious effects. Beyond debt’s direct impact on financial security, research increasingly suggests that it and related financial strains may impair health, which in turn can adversely impact both the financial and non-financial well-being of older adults. However, the existing literature cannot sufficiently explain the causal pathway linking poor health with debt, and we have very limited understanding of how health might vary by the characteristics of debt.

To examine the impact of debt on the health of older Americans and appropriately address the endogenous nature of this connection, this project will employ marginal structural models and fixed-effect regression using data from the Health and Retirement Study.

Abstract

This project will use the March Current Population Survey and the National Vital Statistics System to separately estimate the impacts of job loss, health concerns, and the ability to work remotely during the pandemic on the labor force participation of older workers. SSA has an interest in this question because the national labor market will improve before a vaccine is found, but older workers may not participate in the recovery if they are primarily driven by fear of catching COVID-19 and cannot work without risk of infection.

The current public health crisis is uniquely challenging for older workers. Not only do they face a loss of earnings and an erosion of savings due to widespread stay-at-home orders, but they are also particularly vulnerable to the virus itself. Whether these workers choose to persist in the labor market or retire and claim Social Security benefits depends on three interrelated factors: 1) the difficulty of finding work (local labor demand); 2) fear of catching the virus; and 3) the ability to work from home. Policies that stimulate labor demand – by allowing non-essential businesses to reopen, for example – will not entice older workers back into the labor market if they are afraid of getting sick and they cannot work from home.

Abstract

This project uses data from the National Vital Statistics System, the American Community Survey, and the National Health Interview Survey to examine how changes in disability-free life expectancy affect people’s ability to work longer and delay claiming Social Security benefits by gender, race/ethnicity, and education. SSA has an interest in this question generally, and in particular in light of COVID-19 and the likelihood that the current cohort approaching retirement will be particularly vulnerable to this virus when they have underlying health problems. Such vulnerability may lead to accelerated retirement in the unhealthy members of this cohort.

Until 2010, overall disability-free life expectancy seemed to have been on a continuous upward trend (e.g., Munnell, Soto, and Golub-Sass 2008; Cutler, Ghosh, and Landrum 2014; Crimmins, Zhang, and Saito 2016; Chernew et al. 2017). However, no study has explored trends in the last decade, even though recent developments suggest the potential for reversal, especially for minorities and those with less education. This project will therefore assess how recent trends in physical limitations and mortality have affected disability-free life expectancy for men and women age 50 today, by socioeconomic status.

Abstract

This project will use publicly available data from the Longitudinal Employer-Household Dynamics program, the American Community Survey, and the Current Population Survey to analyze the evolution of demand for older workers in the United States and its relationship to the aging of the workforce. Understanding changes in the age composition of the labor force and corresponding adjustments in labor demand is crucial for the Social Security Trustees’ long-term projections of labor market outcomes for older adults.

The stress that the aging population puts on the nation’s retirement system has inspired much research and policy analysis that has focused on increasing employment at older ages as a key factor in relieving that stress. However, most of the attention has been directed at increasing labor supply among older workers, while employers’ willingness to employ them has been largely neglected. Understanding the demand side of the labor market and its adaptability to the aging workforce could help the Trustees improve their projections of future employment and policymakers hone policies for increasing employment at older ages.

Abstract

This proposal will use the Health and Retirement Study, the National Longitudinal Survey of Youth, the Panel Study of Income Dynamics, and the Survey of Income and Program Participation, as well as the Continuous Work History Sample (if possible) to estimate the percentage of non-covered state and local employees whose pension falls short of Social Security. Federal regulations under IRC 3121 were intended to ensure that non-covered state and local employees receive pension benefits comparable to Social Security. Yet, unintended loopholes in the regulations mean that, in some cases, public pensions fall short.

This project will conduct the most extensive evaluation of the topic to date, proceeding in three parts. It will examine multiple datasets to understand the full distribution of career tenure and earnings of non-covered workers in the state and local sectors.

Abstract

This proposal will combine information from Actuarial Valuations and the Annual Survey of Public Employment and Payroll with the data gathered from a separate study on employee tenure and earnings to estimate the percentage of non-covered workers whose benefits fall short of Social Security. Federal regulations under IRC 3121 were intended to ensure that non-covered state and local employees receive pension benefits comparable to Social Security. Yet, unintended loopholes in the regulations mean that, in some cases, public pensions fall short.

This project will use the detailed data from a separate study to calibrate a model of defined benefit (DB) adequacy that builds on the analysis in Quinby, Aubry, and Munnell (2020). It will expand the model to assess the adequacy of defined contribution (DC) and “hybrid” DB-DC plans for non-covered workers.

Abstract

This project will document the local-area predictors of flows onto the DI and SSI programs and flows out of those programs due to work, using combined data from SSA’s Disability Analysis File (DAF) and other national sources.  The results of this study will inform SSA’s understanding of trends in disability and the drivers of disability benefit application, benefit receipt prevalence, and beneficiary employment milestones.  The project will also produce a public use file of local-area data to facilitate future research and policy analysis.

Numerous studies have documented that local-level factors contribute to the share of working-age adults reporting a disability, the employment rate of workers with disabilities, and disability benefit receipt (e.g., Rupp 2012; Nichols, Schmidt, and Sevak 2017; Sevak et al. 2018; Gettens et al. 2018).  Yet, research to date has not comprehensively assessed how these factors predict flows into and out of DI and SSI.

Abstract

This project will use SSA administrative data to examine the relationship between opioid use and employment outcomes among DI applicants.  The study will provide SSA with information about the work capacity and post-adjudication economic well-being of DI applicants who use opioids, a notable share of the pool of DI applicants.  The results will indicate the extent to which this population would be receptive to services that could facilitate return to work after entry, and the extent to which services delivered to similar workers before DI entry would keep them in the labor force instead.

Although recent studies suggest that opioid use can have negative consequences for economic outcomes (Krueger 2017; Franklin et al. 2014; Savych, Neumark, and Lea 2018), little is known about this relationship among DI applicants.  This study will build on the results of an ongoing RDRC project that uses a supervised machine learning method to classify medication information and identify opioid use among DI applicants.

Abstract

This project will use data from the evaluation of the Benefit Offset National Demonstration (BOND) to assess the efficacy of comparative regression discontinuity (CRD) and regression discontinuity (RD) relative to each other and to randomized controlled trials (RCTs).  RD is known as a relatively rigorous non-experimental method but produces imprecise results that apply to small populations.  CRD addresses these issues.  The findings will support interpreting CRD and RD studies on DI and related programs.  They might also help SSA decide whether to consider these methods for testing impacts of proposed rules, using criteria such as duration of benefit receipt and beneficiary age to define those eligible and ineligible for the new rules.  The CRD and RD methods are potentially attractive because they can avoid many of the challenges and costs of an RCT, but only if their validity is high.

We will estimate CRD and RD models using simulated assignment to the BOND treatment group based on cut-points on duration of benefit receipt at the start of the BOND program.  We will compare those estimates to each other and to RCT estimates for the treated group, for CRD, and to RCT estimates for those near to the cut-point, for RD.

Abstract

This study will use data from SSA’s Structured Data Repository (SDR) to document trends in opioid use among applicants to disability insurance (DI) and the extent to which opioid use is predictive of initial award, an award within five years, and mortality.  The findings will inform SSA’s projections about future program entry based on aggregate trends in opioid use.  The rise in opioid use nationwide – coupled with the numerous DI applicants who have conditions associated with opioid use, such as musculoskeletal problems – suggests that opioid use may be common and increasing among DI applicants.  Beneficiaries cannot qualify for DI on the basis of drug addiction, but opioid use may exacerbate the effects of other conditions that meet DI qualifications.  This study will address a major data issue that limits what is known about opioid use among DI applicants.  Applicants are required to report their medications, but medications are recorded as a combination of coded and open-ended text fields.  This study will capitalize on a previously developed supervised machine-learning algorithm to identify opioids recorded in freeform text and combine that information with opioids identified in populated medication codes.

Abstract

Labor-force participation (LFP) of prime-age workers – an important factor in the actuarial projections of the OASI program – has declined secularly since 2000.  Simultaneously, an accumulation of evidence suggests that the concentration of employers in local labor markets has increased, giving firms greater bargaining power in employment negotiations and potentially driving down LFP.  The aim of this project is to examine whether markets with higher employer concentration have substantially lower LFP, and whether the relationship is stronger for employees with less bargaining power, such as the less-educated and the non-unionized.

Although a large literature examines the factors affecting prime-age LFP, the recent decline is not fully understood.  Simultaneously, a parallel line of research suggests that employer concentration slows real wage growth, but the effect of employer concentration on LFP itself has been understudied.  By linking these two phenomena, this project will promote a better understanding of the drivers of prime-age LFP.  To analyze the relationship between employer concentration in local labor markets and prime-age LFP, this project will combine data from the Longitudinal Business Database, the Local Area Employment Database, and the American Community Survey.

Abstract

The study links data from the emergency shelter systems in several large American cities with SSA data to investigate the pattern of desistance from homelessness among those in the age cohort who have been disproportionately impacted by homelessness for over 20 years and who are now approaching retirement age.  The specific research questions to be addressed by the study are as follows: 1) To what extent does mortality contribute to the observed pattern of desistance from homelessness among older adults?; 2) How does premature death impact the ability of persons with a history of homelessness to receive Social Security retirement benefits? To what extent do individuals with earnings histories that would render them eligible for Social Security retirement benefits die prior to reaching the statutory age for claiming these benefits?; and 3) To what extent do older homeless adults receive Social Security retirement benefits, SSDI and SSI? Does receipt of these benefits help facilitate exits from homelessness?