Assessing Systematic Differences in Industry-Award Rates of Social Security Disability Insurance
NBER Retirement Research Center Paper No. NB 12-13
Issued in September 2012
Although a large body of literature has examined the role of worker incentives and characteristics for explaining high and rising Social Security Disability Insurance (SSDI) rolls, little is known about the role of firms and industries. Yet, firms face potentially important incentives to exploit social insurance systems, as explicitly recognized in the design of Unemployment Insurance, and may have substantially different work environments. In this project, we characterize differences in SSDI award rates by industry using the March Current Population Survey (CPS). The CPS allows us to construct multiple measures of SSDI receipt, use a longitudinal match to construct new SSDI awards, and to adjust industry‐ specific SSDI award rates for differences in worker characteristics, such as educational background, family status and occupation. Our findings indicate substantial differences in the average rates of new SSDI awards across industries that are robust to important differences in worker composition.
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This paper was revised on November 15, 2013