Who is Screened Out? Application Costs and the Targeting of Disability Programs

45 Pages Posted: 5 Jun 2017 Last revised: 19 Feb 2023

See all articles by Manasi Deshpande

Manasi Deshpande

University of Chicago

Yue Li

SUNY University at Albany

Multiple version iconThere are 2 versions of this paper

Date Written: June 2017

Abstract

The application process is critical to the targeting of disability programs because disability, relative to other tags, is difficult to observe and costly to verify. We study the effect of application costs on the targeting of disability programs using the closings of Social Security Administration field offices, which provide assistance with filing disability applications. Using administrative data from the Social Security Administration, we find that field office closings lead to large and persistent reductions in the number of disability recipients and reduce targeting efficiency based on current eligibility standards. The number of disability recipients declines by 13% in surrounding areas, with the largest effects for applicants with moderately severe conditions, low education levels, and low pre-application earnings. Evidence on channels suggests that most of the reduction in applications is attributable to increased congestion at neighboring offices rather than increased travel times or costs of information gathering.

Suggested Citation

Deshpande, Manasi and Li, Yue, Who is Screened Out? Application Costs and the Targeting of Disability Programs (June 2017). NBER Working Paper No. w23472, Available at SSRN: https://ssrn.com/abstract=2980580

Manasi Deshpande (Contact Author)

University of Chicago

1101 East 58th Street
Chicago, IL 60637
United States

Yue Li

SUNY University at Albany ( email )

1400 Washington Avenue
Hudson 241
Albany, NY 12222
United States

HOME PAGE: http://https://sites.google.com/site/yueliecon/home

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