The long-run impact of Temporary Disability Insurance on SSDI claims, earnings stability, and labor force participation

Grant Type: academic

Grant Year: 2018

Grant Amount: $65,000

Grant description:

This project will use administrative data to explore the role of Temporary Disability Insurance policies in shaping long-term labor market outcomes, as well as the receipt of long-term Social Security Disability Insurance. Specifically, the researchers will look at the impact of Temporary Disability Insurance on long-run earnings, labor force participation, and employment stability for those with an employment-limiting disability, as well as whether this program impacts Social Security Disability Insurance claims. The project will assess whether there are groups of workers (by education, earnings, gender, and race) for whom Temporary Disability Insurance is particularly useful in improving labor market outcomes or reducing SSDI claims. Currently, five states provide state-run TDI programs—social insurance-style wage replacement for short-term disability. The project will exploit this state variation, using the SIPP Beta Gold longitudinal data. Research on the impacts of these programs is extremely thin, and this project represents an important step in filling this gap.

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