The Effect of Disability Payments on Household Earnings and Income: Evidence from the SSI Children's Program

Abstract

I estimate the effect of removing children with disabilities from Supplemental Security Income (SSI) on parental earnings and household disability receipt. Using administrative data from the Social Security Administration (SSA), I implement regression discontinuity and differencein- differences designs based on changes in SSA's budget for child medical reviews. I find that parents fully offset the SSI loss with increased earnings, and the loss of the child's SSI payment reduces disability applications by parents and siblings but does not reduce their actual disability receipt. I examine alternative hypotheses for the large parental earnings response.

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