How Do the Disabled Cope While Waiting for SSDI?

Abstract

The wait time for a Social Security Disability Insurance (SSDI) award varies from a few months to a several years. Little is known about how applicants fund their consumption during this waiting time, while they receive no income support or medical benefits from the SSDI program. Using the Survey of Income and Program Participation (SIPP) linked to the Social Security Administration's 831 file, this paper is the first to identify the causal effect of a longer waiting time on the use of these coping strategies using an instrumental variable (IV) approach.We find that applicants react to a longer waiting time by using benefits from the Supplemental Nutrition Assistance Program (SNAP) more frequently. They are also less likely to change their address and to receive Unemployment Insurance (UI) benefits. Moreover, when comparing IV to OLS, our results also indicate that while applicants' spouses do not increase their employment due to an exogenous increase in the waiting time, an increase in their employment leads to a longer waiting time for applicants, presumably because applicants with a working spouse are more likely to appeal an initial denial. Together, these results suggest that coping strategies both help applicants to cope with the waiting time and to extend the waiting time to increase their chances of getting into the program.1

What happens when you wait? Effects of Social Security Disability Insurance wait time on health and financial well‐being

“…Those with a spouse, especially a working spouse, may be better able to cope financially and have an easier time obtaining health insurance. This would be consistent with the finding by Coe et al (2013) that applicants with employed spouses had longer wait times. Unfortunately, the size of my sample does not provide the power needed to investigate effects of wait time on most subgroups – dividing the sample generally results in weak instruments.…”

“…Long waits force applicants to change their behaviors in order to fund consumption. Coe, Lindner, Wong, and Wu (2013) investigate the coping strategies that applicants use and find that longer waiting times increase SNAP usage while decreasing the use of unemployment insurance and the likelihood of changing addresses.…”