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Measuring the Spillover to Disability Insurance Due to the Rise in the Full Retirement Age

December 2, 2010
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Working Paper by Norma B. Coe and Kelly Haverstick

Abstract

The increase in the full retirement age in the Social Security program provides exogenous variation in the generosity in the Social Security Disability Insurance (SSDI) program, based only on birth year. We exploit this variation to estimate how responsive SSDI applications are to the financial incentive to apply. We find that a 1-percentage-point decrease in the retirement-to-disability benefit ratio leads to a 0.25-percentage-point increase in the SSDI application rate for the sample, which represents an 8-percent increase in applications per two years. When weighted to account for sampling design, we estimate that this change in the financial incentive accounted for about 5 percent of the SSDI applications in 2009. However, we do not find a corresponding increase in SSDI receipt based on the financial incentives…

Senior man working at laptop at home
Senior man working at laptop at home
Author(s)
Headshot of Norma B. Coe
Norma B. Coe
Headshot of Kelly Haverstick
Kelly Haverstick
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Executive Summary
Citation

Coe, and Kelly Haverstick. 2010. "Measuring the Spillover to Disability Insurance Due to the Rise in the Full Retirement Age" Working Paper 2010-21. Chestnut Hill, MA: Center for Retirement Research at Boston College.

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Associated Project(s)
  • BC10-13
Topics
Social Security
Publication Type
Working Paper
Publication Number
WP#2010-21
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