The Impact of Losing Childhood Supplementary Security Income Benefits on Long-term Outcomes

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by Priyanka Anand and Hansoo Ko, George Mason University

Supplemental Security Income (SSI) is an important source of income for many youth with disabilities. In November 2021, 1.1 million SSI recipients were under age 18, which is 13.6 percent of all SSI recipients (SSA 2021). To qualify for SSI, a child must have a medically determinable physical or mental impairment (including an emotional or learning problem) which results in marked and severe functional limitations that have lasted or can be expected to last for a continuous period of at least 12 months or be expected to result in death. For adults, the disability criteria are the same except that their medically determinable physical or mental impairment must also result in the inability to do any substantial gainful activity. Starting in 1996, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) stated that child SSI beneficiaries must go through a redetermination process when they turn 18 in order to evaluate their impairments based on the adult definition of disability. Those with conditions that result in marked or severe functional limitations but do not preclude engaging in substantial gainful activity were likely to lose their benefits during age-18 redetermination. Hemmeter et al (2017) shows that the rates of SSI cessation after age 18 redetermination ranges from 20 to 47 percent depending on the state, with state differences being attributed to variation in procedures and staffing of the state Disability Determination Service (DDS) agencies, economic, policy and program environments, the prevalence of disabilities across states, and optional state SSI supplements. The goal of our proposed project is to estimate the impact of losing child SSI benefits after turning 18 on long- term outcomes, which addresses SSA’s research focal area of the economic security of SSA beneficiaries.

There is a large body of research that examines the relationship between child SSI and long- term outcomes, but most of this work focuses exclusively on adult employment and income as an outcome. The consensus is that losing SSI at age-18 redetermination results in higher employment and earnings (Hemmeter et al 2017), but there is higher income volatility, and the higher earnings only replace approximately one-third of the value of the lost benefits (Deshpande 2016a). Consistent with these findings, Levere (2017) finds that for individuals with mental disorders, increased exposure to SSI during childhood results in lower overall earnings in adulthood. However, there is also evidence suggesting that receiving SSI at birth results in several positive outcomes, including a higher likelihood of moving to a higher income neighborhood (Ko et al 2020), which has generally been shown to have long-term positive impacts on outcomes such as college attainment, marriage, and fertility outcomes (Chetty, Hendren, and Katz 2016; Chetty and Hendren 2018; Chyn 2018). There is also evidence that disability benefit receipt may have intergenerational effects; for example, Dahl, Kostol and Mogstad (2014) find that, in Norway, receipt of disability benefits increases the likelihood of receiving disability benefits of their adult children. Our project seeks to better understand the impact of losing SSI at age-18 redetermination on broad measures of well-being and explores whether these impacts have intergenerational effects.

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