The application process is critical to the targeting of disability programs because disability, relative to other tags, is difficult to observe and costly to verify. We study the effect of application costs on the targeting of disability programs using the closings of Social Security Administration field offices, which provide assistance with filing disability applications. Using administrative data from the Social Security Administration, we find that field office closings lead to large and persistent reductions in the number of disability recipients and reduce targeting efficiency based on current eligibility standards. The number of disability recipients declines by 13% in surrounding areas, with the largest effects for applicants with moderately severe conditions, low education levels, and low pre-application earnings. Evidence on channels suggests that most of the reduction in applications is attributable to increased congestion at neighboring offices rather than increased travel times or costs of information gathering.
We study the effect of application costs on the targeting of disability programs. We identify these effects using the closings of Social Security Administration field offices, which provide assistance with filing disability applications. Closings lead to a persistent 16 percent decline in the number of disability recipients in surrounding areas, with the largest effects for applicants with moderately severe conditions and low education levels. Disability applications fall by only 10 percent, implying that the closings reduce targeting efficiency based on current eligibility standards. Increased congestion at neighboring offices appears more important as a channel than higher travel or information costs. (JEL H55, I13, I18, J14)
I estimate the effects of removing low-income youth with disabilities from Supplemental Security Income (SSI) on their earnings and income in adulthood. Using a regression discontinuity design based on a 1996 policy change in age 18 medical reviews, I find that youth who are removed from SSI at age 18 recover one-third of the lost SSI cash income in earnings. SSI youth who are removed and stay off SSI earn on average $4,400 annually, and they lose $76,000 in present discounted observed income over the 16 years following removal relative to those who do not receive a review. (JEL I30, I38, J14)
The application process is critical to the targeting of disability programs because disability, relative to other tags, is difficult to observe and costly to verify. We study the effect of application costs on the targeting of disability programs using the closings of Social Security Administration field offices, which provide assistance with filing disability applications. Using administrative data from the Social Security Administration, we find that field office closings lead to large and persistent reductions in the number of disability recipients and reduce targeting efficiency based on current eligibility standards. The number of disability recipients declines by 13% in surrounding areas, with the largest effects for applicants with moderately severe conditions, low education levels, and low pre-application earnings. Evidence on channels suggests that most of the reduction in applications is attributable to increased congestion at neighboring offices rather than increased travel times or costs of information gathering.
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