CAREER:Optimal Design of Disability Programs

University Of Chicago, Chicago IL

Investigators

Abstract

Very little is known about the effectiveness of disability programs that reaches 13 million recipients in the US. This research project will use economic theory and experimental methods to study the best ways to design effective disability programs. The research consists of three projects. The first project uses experimental methods to investigate how expectations about the availability of disability benefits in adulthood affects investment in human capital in childhood. The second project will use administrative and survey data to investigate whether disability programs insure against health related and non-health related consumption shocks. The researcher will analyze survey and administrative data to study how disability applicants, recipients, and non-applicants compare in terms of health shocks, broader shocks in permanent income and other resources to tide consumers over in periods of economic crises. The third project will study the spillover effects of disability programs. Previous studies of disability programs only focus on recipients; however these benefits are likely to affect non-recipients through labor markets as well as market for goods. The researcher has unique access to the SSI data archives that allows her to get the necessary data to conduct this research project. The project also has an innovative education plan that includes teaching, outreach to disability recipients, policy outreach to state authorities, and interaction with congressional committees that design disability programs. This research project will help improve the design and implementation of disability programs and establish the US as the global leader in disability programs. This CAREER research project consists of a series of empirical studies on the optimal design of disability programs. The first study addresses whether expectations about the availability of disability benefits in the future affect current human capital investment. It will implement a randomized controlled trial of providing families with information about the likelihood that children receiving disability benefits will continue receiving these benefits in adulthood. It will then evaluate the effects of the intervention on human capital investment. The second study addresses the extent to which disability programs insure non-health risk. It will use a positive analysis of the characteristics of disability recipients and non-recipients, as well as a normative analysis of the value of providing disability groups to different groups. The third study addresses the general equilibrium effects of disability insurance. It will use variation across geographic areas in the ease of applying for disability benefits to estimate the effects of these programs on non-recipient family members, local labor markets, and community outcomes. This research project will help improve the design and implementation of disability programs and establish the US as the global leader in disability programs. This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.