Determinants of State SSDI Employment and Exit Rates: A Time-Series Cross-Sectional Analysis

Despite numerous public policies aimed at moving people from Social Security Disability Insurance (SSDI) back into employment, SSDI exits continue to decline, while caseloads and program expenditures continue to mount. Capitalizing on cross-state variation in public policies affecting SSDI beneficiaries, this dissertation uses a time-series cross-sectional analysis to assess the determinants of variation in rates of SSDI benefit suspension and termination due to employment from 1997--2007. This dissertation includes variables characterizing state economies, SSDI beneficiary populations, and relevant public policies, in addition to recent reforms aimed at increasing SSDI terminations due to work: the Ticket to Work and Medicaid Buy-In programs.;The dissertation finds there has been no impact of the Medicaid Buy-In program on rates of SSDI benefit suspensions or terminations due to employment. The Ticket to Work program had a small but statistically significant impact on rates of benefit suspension due to work (e.g. between 2004--2007, TTW resulted in about 1,400--3,700 benefit suspensions each year). However, increases in benefit suspension resulting from Ticket to Work are tied to employment in low-skill, low-wage industrial sectors, jobs which are unlikely to induce beneficiaries to leave the rolls in the future.;An important determinant of state rates of benefit termination due to work is the size of the older SSDI population---suggesting that as the population ages, SSDI exit rates will continue to decline in the absence of policy intervention. The most significant determinants of SSDI beneficiary employment outcomes are state economic conditions, suggesting that a non-trivial share of SSDI beneficiaries have the capacity to work. However, current policy linking public health insurance to the disability rolls creates a work disincentive that the Medicaid Buy-In programs seem insufficient to overcome. Assessing policies with the potential to remove the current employment disincentives associated with the public health benefits related to SSDI and SSI eligibility promises to be a fruitful area for future research---particularly in light of the 2010 Patient Protection and Affordable Care Act.