Do Stronger Employment Discrimination Protections Decrease Reliance on Social Security Disability Insurance? Evidence from the US Social Security Reforms

The Social Security Amendments of 1983 made some significant cuts to the US Social Security program. Notably, the law raised the age at which individuals could retire with full Social Security benefits and raised penalties for retiring before that age. The intent of the law was to delay when seniors claimed benefits in order to improve the Social Security program’s long-term financial solvency. However, it also increased Social Security Disability Insurance (SSDI) applications by making SSDI more generous than claiming early retirement benefits. In "Do Stronger Employment Discrimination Protections Decrease Reliance on Social Security Disability Insurance? Evidence from the US Social Security Reforms," Senior Economist Mashfiqur Khan and co-authors explore whether state disability and age discrimination laws moderated those spillovers and estimate the effects of these laws on SSDI applications and receipt. They find that both a broader definition of disability and the ability to sue for more damages under state disability discrimination law are associated with a significant reduction in induced SSDI applications and receipts. They also find some evidence that some features of state disability discrimination laws are associated with increased employment, especially for women.