Health Care Management Papers

Document Type

Journal Article

Date of this Version

2-2003

Publication Source

The Quarterly Journal of Economics

Volume

118

Issue

1

Start Page

157

Last Page

206

DOI

10.1162/00335530360535171

Abstract

Between 1984 and 2001, the share of nonelderly adults receiving Social Security Disability Insurance income (DI) rose by 60 percent to 5.3 million beneficiaries. Rapid program growth despite improving aggregate health appears to be explained by reduced screening stringency, declining demand for less skilled workers, and an unforeseen increase in the earnings replacement rate. We estimate that the sum of these forces doubled the labor force exit propensity of displaced high school dropouts after 1984, lowering measured U. S. unemployment by one-half a percentage point. Steady state calculations augur a further 40 percent increase in the rate of DI receipt.

Copyright/Permission Statement

This is a pre-copyedited, author-produced PDF of an article accepted for publication in the quarterly journal of economics following peer review. The version of record is available online at http://qje.oxfordjournals.org/content/118/1/157.short

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Date Posted: 27 November 2017

This document has been peer reviewed.