Factors Determining Participation of the Elderly in SSI

Kathleen McGarry

NBER Working Paper No. 5250
Issued in September 1995
NBER Program(s):Economics of Aging

The same low participation rates which plague many welfare programs have been observed among the elderly eligible for Supplemental Security Income (SSI). A number of hypotheses have been offered to explain the low enrollment, but none has attracted universal acceptance. In this paper I use the Survey of Income and Program Participation (SIPP) to examine the participation of the elderly in SSI. Because of the high quality of the data, I am able to determine eligibility more accurately than in most previous studies. In this sample, only 56 percent of those whom I determine to be eligible for SSI are presently receiving benefits. I model the decision to participate as a probit equation, but modify the likelihood function to account for measurement error in the expected benefit. The results indicate that participation is primarily determined by the financial situation of the eligible individuals. Although all those eligible for SSI are poor, those with little in the way of other resources are significantly more likely to participate. This finding differs from widespread beliefs that eligible individuals are discouraged by the difficulty of the application process, or that many are uninformed about the program.

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Document Object Identifier (DOI): 10.3386/w5250

Published: Journal of Human Resources, 1996, vol. 31.

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