The Impact of Temporary Assistance Programs on Disability Rolls and Re-employment

“[The authors] examine how program participation in four temporary assistance programs affects claims for [Social Security Disability Insurance (DI)] and [Supplemental Security Income (SSI)] as well as re-employment of adults who recently stopped working. These programs are Temporary Assistance for Needy Families…, Supplemental Nutrition Assistance Program (SNAP, also known as food stamps), Unemployment Insurance (UI), and Temporary Disability Insurance programs (TDI). [The] study is motivated by the observation that application rates for DI and SSI increase in periods of high unemployment, and that temporary assistance benefits help those who lose employment buffer income losses before they apply for DI or SSI” (p.1).

 

“[The authors] first discuss several channels through which participation in one of the temporary assistance programs may affect re-employment and application for DI or SSI. Cash benefits from such temporary assistance programs could increase or decrease applications for DI or SSI. depending on whether such transfers support workers in their application for DI and SSI or whether they reduce the need to apply for DI and SSI in order to receive additional income support. Temporary cash benefits make searching for a job less worthwhile, but also may make it possible to engage in job search in the first place” (p.1-2).

 

“The primary data source is the Survey of Income and Program Participation…for the years 1996 to 2010” (p.20). “[The authors] select a sample of workers who lose employment and create spells of non-employment ending in re-employment, application for DI, or application for SSI. Since estimates based on observational data are likely to be biased due to selection and simultaneity,” the authors employ an instrumental variables approach to address this issues (p.2).  They conduct regression analyses “to estimate the causal effect of taking up temporary assistance on each of the outcomes” (p.2).

 

(Abstractor: Author and Website Staff)

“[Non-causal] associations show that participation in each of the four temporary assistance programs is associated with a lower re-employment probability. Furthermore, UI claimants tend not to apply for SSI, while TDI recipients tend to apply for DI. Workers who are more likely to receive SNAP benefits are also more likely to apply for SSI, but less likely to apply for DI” (p.2). “Results from [the more rigorous] IV regressions are in most cases quite different. For re-employment, [the authors did] not find that participation in temporary assistance programs leads to a lower re-employment probability. Furthermore, participation in UI decreases applications for DI, which is consistent with the idea that this program is a substitute for DI. For SSI, [the authors found] a positive effect of taking up SNAP benefits on subsequent applications, but only for [one model of] specification” (p.3). “Three main conclusions can be drawn from these findings. First, applications for DI and SSI are sensitive to participation in temporary assistance programs. For re-employment, [the authors] do not find a systematic effect…. Second, the size of the temporary assistance programs and their overlap with DI and SSI seems to matter. [The authors] only found significant effects for UI and SNAP, which are the two largest programs considered here. The target population for UI overlaps with the one for DI, but not with SSI as a means-tested program. Conversely, SNAP and SSI are both means-tested programs, but because these people tend to be poor and have a weak labor force attachment, they often do not qualify for DI benefits. Third, [the authors] find a negative effect of UI participation on DI, but (sometimes) a positive effect of SNAP participation on SSI. There are different explanations that can reconcile [the inconsistent findings]. For instance, the effect of receiving temporary assistance on applications for DI and SSI could vary by benefit level….Other explanations are that program effects depend on the population…or on other characteristics of temporary assistance programs” (p.3). “Which of these explanations contributes to the observed findings remains unclear….By focusing on specific aspects of the interaction between temporary assistance programs and applications for DI and SSI, future research may be able to provide clearer answers to these questions” (p.37). (Abstractor: Author)

• Last Updated:
• Created:
• Resource Publication Date: 2012
• Author(s): Lindner, Stephan and Nichols, Austin.
• Organizational Author(s): Urban Institute
• Funding Source: Funding source not identified
• Resource Availability: Publicly available
• Posted by: Wesley Peterson
• Posted in: Workforce System Strategies