How Does Past Incarceration Impact Work, Disability, and SSI?

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Gary V. Engelhardt, Syracuse University

Understanding the determinants of applications for, and receipts of, DI and SSI benefits is a cornerstone of Social Security program analysis. Since the Great Recession, DI and SSI applications have declined steeply, tracking very closely the (pre-pandemic) improvement in the labor market. This strong time-series relationship has masked other potential changes in the applicant pool, such as the aging of the formerly incarcerated population. This project contributes to the DI and SSI knowledge base by estimating the net impact of incarceration in early and mid-adulthood on later-life employment, and on DI and SSI applications and benefit receipt.

Specifically, the project focuses on men born between 1950 and 1970, the cohorts just prior to and initially impacted by the rise in incarceration, and examines their labor-market, application, and benefit receipt from 2010-2020, when they are roughly age 50 and older. To isolate causal effects independently from the strong time-series trends highlighted above, this analysis uses detailed micro-data from three nationally representative surveys – the Health and Retirement Study, the National Longitudinal Survey of Youth ‘79 and the American Community Survey – and a novel econometric identification strategy.