http://digital.library.wisc.edu/1793/82262 FY2020 Research Projects 2026-03-15T02:02:33Z http://digital.library.wisc.edu/1793/84685 GRMF20-02: Filling in the Gap: The Role of Employer-provided DI Abdulhadi, Adibah The risk of disability for workers is not trivial. While many workers rely on public disability programs such as the Social Security Disability Insurance (SSDI) to protect them against disability risk, these programs do not provide complete insurance. For example, SSDI does not cover short-term disabilities. This paper explores the use of employer-provided disability insurance (DI) among Wisconsin state public employees. The paper describes these disability benefits and how they provide a safety net for workers who have a debilitating medical condition. Generally, low income workers are less likely to be covered by employer-provided DI although they tend to need and claim DI at a higher rate. Next, the paper examines the use of short-term DI and worker’s trajectories before and after claiming short-term DI. A large majority (64 percent) of claimants return to work. Another 24 percent transition to long-term DI while the rest quit their jobs (7 percent) or retire (5 percent). Short-term DI claimants are able to maintain their earnings and hours worked up to the year of claim. Afterwards, their earnings and hours worked drop even for those who return to work. Moreover, workers who eventually claim short-term DI use a lot of sick leave even in the years prior to claiming. This paper studies how employer-provided DI provides additional protection against the risk of income loss due to a disability, beyond the coverage provided by SSDI. I use administrative data on Wisconsin state public employees who have access to three types of employer-provided DI. The first is the Income Continuation Insurance (ICI) that pays benefits in the event of a work-limiting disability which can be either short-term or long-term. This program is optional. Workers who are interested in ICI must pay a monthly premium. The other disability programs are the Long-term Disability Insurance (LTDI) and the 40.63 Disability Retirement benefit. These two are more similar to SSDI. They cover only permanent and severe disabilities. Moreover, coverage is not optional. All workers who participate in the Wisconsin Retirement System (WRS) were covered by either LTDI or 40.63 Disability Retirement. This paper contributes to the literature by studying workers during the period before they become permanently disabled and apply for long-term DI. There is a large literature on the labor response to SSDI and return-to-work programs. However, less is known about the period prior to DI application. I am grateful to the Wisconsin Department of Employee Trust Funds (ETF) for preparing the administrative dataset that is extensively used in this paper, especially the help of Erin Esser. I also thank J. Michael Collins, Justin Sydnor, Mary Hamman, Jeffrey Smith and the participants at the Midwest Economics Association conference and the American Society of Health Economists conference for helpful comments. 2020-01-01T00:00:00Z http://digital.library.wisc.edu/1793/84684 WI20-03: Social Security Disability Insurance (SSDI) and Intergenerational Economic Mobility Fletcher, Jason; Jajtner, Katie; Messel, Matt Access to economic opportunity in the United States is not uniform. In addition to heterogeneous mobility patterns by race/ethnicity and geography, new research suggests children whose parent(s) have work-limiting health conditions also experience lower economic mobility. Since Social Security Disability Insurance (DI) is designed to mitigate adverse economic consequences of work disability by monthly cash transfers, this study investigates whether this policy may also mitigate observed lower economic mobility for beneficiaries’ children. Using common measures of intergenerational economic mobility, this study examines economic mobility along two margins: 1) parents’ self-report of work-limiting health conditions, and 2) parent DI application history. Data come from the Survey of Income and Program Participation (SIPP) matched with Social Security Administration data. Children of parents with work limitations on average have 4.1 percentiles less upward mobility from the 25th percentile of parent income and 4.3 percentiles more downward mobility from the 75th percentile of parent income relative to children whose parents do not report work-limitations. Children’s economic mobility ought to decrease with declining parent health unless DI helps shapes outcomes. Using the SSA’s 5-step Disability Determination Process, parents initially awarded DI are hypothesized to have the worst health while parents initially denied (but later accepted) likely have marginally better health. Despite worse parent health, children of initial DI awardees have 3.6 percentiles more upward mobility relative to peers of parents who are initially denied benefits, suggesting DI may moderate economic mobility in the population. We build on [previous] literature examining the role of public policy moderating economic opportunity by investigating if Disability Insurance (DI) may moderate economic opportunity for children whose parents have health conditions that limit work. Not only has research previously identified this population as being at risk of decreased economic opportunity (Jajtner, 2020), but DI also specifically targets severe forms of work limitations in this population aiming to assuage economic disadvantages. We consider competing frameworks where DI could potentially improve economic opportunity with fewer financial constraints and better health or whether it could discourage economic opportunity through learned reliance on benefits . Our results suggest DI may play an important role in improving economic opportunity for children of work-limited parents, although further research using a causal framework is warranted. Participants at the University of Wisconsin – Madison (UW) Health Economics working group, UW Center for Financial Security seminar, Wisconsin Retirement and Disability Research Center Fall 2020 workshop, Fordham University Economics seminar, and Population Association of America annual meeting 2021 provided helpful suggestions for improvement. 2020-01-01T00:00:00Z http://digital.library.wisc.edu/1793/83783 IRP20-01: Criminal Justice Involvement and Well-Being in Old Age Doleac, Jennifer This paper uses data from the Criminal Justice Administrative Records Systems linked with survey and administrative data sources from the U.S. Census Bureau to provide the first evidence on the looming retirement crisis stemming from the aging generations of Americans who have been increasingly impacted by criminal justice policies like mass incarceration. First, we measure the share of current retirees with criminal records, and provide projections of how these rates among retiring cohorts will increase through 2050. We find that approximately 10% of men at age 62 have faced a felony criminal charge, and this will grow by 70% over the next two decades, peaking among cohorts retiring around 2040. Second, we characterize the living circumstances of those with criminal histories approaching retirement. In spite of almost a decade of criminal desistance on average, this population exhibits serious economic vulnerability, higher disability rates, and greater detachment from kinship networks, factors that put these individuals at risk in retirement. Current data indicate a growing reliance on safety net programs such as the Supplemental Security Income program, for which eligibility does not depend on work history. 2020-01-01T00:00:00Z http://digital.library.wisc.edu/1793/83782 WI20-Q2: Economic Security of Older Adults during the COVID-19 Crisis: Early Data to Inform Research and Policy Collins, Michael; Moulton, Stephanie; Brown, Meta This study documents the credit outcomes of older adults immediately before and after the onset of the COVID-19 pandemic in the US. Using credit data to track indicators of financial distress, this study shows that on average, older adults experienced larger reductions in total household debt in the period after the start of the COVID-19 pandemic, relative to adults age 18 to 49. However, there is significant heterogeneity within the population of older adults, where those with higher incomes, with mortgage debt, and with higher credit scores experienced the largest declines. Lower-income older adults experienced an increase in total debt during this period. We also find that older adults are significantly less likely to be approved for new credit in 2020, with the oldest adults (72 and older) experiencing the largest decline in approval rates among those seeking credit. Our results indicate that a large share of older adults benefited from loan payment accommodations during the COVID-19 pandemic. These borrowers tend to be more vulnerable based on debt and credit characteristics, and suggest caution about how well they will manage debt payments when accommodations expire. Finally, we find small but persistent evidence that people in states harder hit by COVID-19 are also among those most likely to rely on accommodations. Overall, these data suggest significant heterogeneity in the credit experiences of older adults during the COVID-19 pandemic that may affect future household financial security. 2020-01-01T00:00:00Z