NBER Disability Research Center

NB13-04, The Effect of the Supplemental Security Income Children’s Program on Parental Labor Supply and Long-Term Outcomes of Enrolled Children

Manasi Deshpande, PhD Candidate, MIT

Security Income (SSI) enrollment among children under age 18 has surged in recent decades, reaching 1.2 million in 2010. An increasing proportion of children are enrolled with mental diagnoses that are difficult to verify. Despite the surge in enrollment, little is known about the SSI children’s program with respect to consumption smoothing, moral hazard, or the long-term educational and employment outcomes of enrolled children. I propose to use microdata from the SSA to evaluate the effect of the SSI children’s program on parental labor supply and on the long-term education and employment of enrolled children. I will use two instruments to identify this effect: 1) continuing disability reviews (CDRs) as an instrument for termination from the SSI program, and 2) the disability examiner allowance rate as an instrument for acceptance to the SSI program. In the first year of the project, I will evaluate the effect of the SSI children’s program on parental labor supply and the future earnings of enrolled children. If awarded a second year of funding, I will study the effect of SSI on contemporaneous Medicaid enrollment, future transfer payment receipt, and educational outcomes of enrolled children.