Who Is Screened Out? Application Costs and the Targeting of Disability Programs

Abstract

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.

The Effect of Lower Transaction Costs on Social Security Disability Insurance Application Rates and Participation

“…This suggests that the information channel may play a more important role for appeals, perhaps because third‐party preparers are more readily available in urban areas . This finding is also consistent with Deshpande and Li (), who find evidence that applications fall in zip codes experiencing a field office closure, likely due in part to the associated increase in travel costs.…”

“…Our coefficient of 0.05 translates into a 2.2 percent increase in applications for the average county, which implies that the decrease in application costs via iClaim can explain approximately 15.5 percent of the average increase in applications during this time period . This magnitude is smaller than Deshpande and Li's () finding that SSDI applications decline by 16 percent in areas near field office closures after 2011, but nonetheless suggests that increased online access could offset some of the impacts of these closures. The impact of iClaim is also smaller than Armour (), who finds that SSDI applications nearly double among health‐impaired older adults who receive a Social Security Statement.…”

Fear and the Safety Net: Evidence from Secure Communities

“…43 To the extent the implementation of SC heightens deportation fear, our estimates therefore capture both the actual reduction in safety net take-up as well as an increase in false negatives. Although both effects are of interest, they have very different policy implications.…”

“…During the time period of our study, some states used the E-Verify program to check workers' eligibility to work legally in the United States. ICE also regularly conducted I-9 audits at workplaces to verify 43 Assuming reported participation is less than true participation ( participation = participation − f ear), then…”

Why Leave Benefits on the Table? Evidence from SNAP

“…The 4 theoretical literature has posited the importance of heterogeneous tastes correlated with unobserved attributes (Nichols and Zeckhauser 1982), program complexity (Kleven and Kopczuk 2011), and dynamic income manipulation (Pei 2017). A small body of empirical work has used fine variation in experiments or quasi-experiments to explore the screening properties of specific program design features (Bettinger et al 2012;Deshpande and Li 2017;Ebenstein and Stange 2010), although these papers focus on initial take up rather than retention. There is also descriptive evidence suggesting that low retention in SNAP and public housing waiting lists may be partially explained by low-income households moving frequently and therefore missing important mailings (Mills et al 2014;Waldinger 2018).…”