The Impact of Rehabilitation and Counseling Services on the Labor Market Activity of Social Security Disability Insurance (SSDI) Beneficiaries

Abstract

We use data from a social experiment to estimate the impact of a rehabilitation and counseling program on the labor market activity of newly entitled Social Security Disability Insurance (SSDI) beneficiaries. Our results indicate that the program led to a 4.6 percentage point increase in the receipt of employment services within the first year following random assignment and a 5.1 percentage point increase in participation in the Social Security Administration's Ticket to Work program within the first three years following random assignment. The program led to a 5.3 percentage point increase, or almost 50 percent increase, in employment, and an $831 increase in annual earnings in the second calendar year after the calendar year of random assignment. The employment and earnings impacts are smaller and not statistically significant in the third calendar year following random assignment, and we describe SSDI rules that are consistent with this finding. Our findings indicate that disability reform proposals focusing on restoring the work capacity of people with disabilities can increase the disability employment rate.

Are Reemployment Services Effective? Experimental Evidence from the Great Recession

“…A random assignment study of a job‐training program in the early 2000s finds that structured job counseling led to positive long‐run effects on reemployment rates for the most disadvantaged workers but not for others (Perez‐Johnson, Moore, & Santillano, ). Similarly, a study of Social Security Disability Insurance beneficiaries from 2007 to 2009 finds that those randomly assigned to receive medical care management and job‐counseling services had greater labor market success than those assigned to a control group that did not have such services (Weathers & Bailey, ).…”

Preventing unemployment and disability benefit receipt among people with mental illness: Evidence review and policy significance.

“…Among AB Plus members who had any earnings (16%), average annual earnings were $10,187 during this period, about $2,300 more than the control group (a meaningful, but not statistically significant difference). The significant effects observed for the full AB Plus group were smaller and no longer statistically significant in Year 3, either due to SSA work disincentives, the end of program services, or worsening of beneficiaries’ health conditions (Michalopoulos et al, 2011; Weathers & Bailey, 2014). Findings for the 22% of the study sample with mental illness mirrored these patterns.…”

Social Security Disability Benefits: Characteristics of the Approved and Denied Populations

“…The Mental Health Treatment Study (MHTS) found employment support in combination with comprehensive health benefits, such as systematic medication management, led to a modest positive effect on earnings and a notable effect on reducing hospitalizations (Drake et al, 2016). The Accelerated Benefits (AB) demonstration found the provision of employment support services combined with health insurance to Social Security disability beneficiaries in the 2-year waiting period for Medicare increased earnings (Weathers & Bailey, 2014). In addition, health insurance sharply improved self-reported health among disability beneficiaries and led to a reduction in unmet medical needs (Weathers & Stegman, 2012).…”