How current disability transfer policies discourage work: analysis from the 1990 SIPP

Issue title: Social Security

Article type: Research Article

Authors: Burkhauser, Richard V.^; | Wittenburg, David C.

Affiliations: Center for Policy Research, Syracuse University, 426 Eggers Hall, Syracuse, New York 13244-1090, USA

Note: [] Corresponding author.

Abstract: A critical objective of those interested in economic independence for people with disabilities is their full access to and participation in market work. In this paper we first look at working age men with long-term disabilities, defined as disabled for at least two periods, from the Survey of Income and Program Participation (SIPP) and compare their labor force activity and economic well-being with working age men without disabilities. We find that while men with disabilities are less likely to work and more likely to receive government transfers than other men, the majority of men with long-term disabilities do work and do not receive any form of government transfers. We then focus our analysis on the subpopulation of working age men with disabilities who receive government transfers and show that a substantial share of this population receives benefits from more than one program. We find that the high effective tax rates of these programs make it unlikely that enrollees will rejoin the labor market. We argue policies that target rehabilitation and accommodation would be an excellent way of encouraging persons with disabilities who can work to stay in the labor force.

Keywords: SIPP, Disability, Rehabilitation, Labor force

DOI: 10.3233/JVR-1996-71-203

Journal: Journal of Vocational Rehabilitation, vol. 7, no. 1-2, pp. 9-27, 1996