There is substantial variation in Social Security Disability Insurance (DI) use across the United States, with beneficiary rates ranging from less than one percent to more than one-fifth of a county’s working-age residents. We combine county-level data on DI applications and awards with data on labour market characteristics, living costs and population health to model how these factors contribute to the geographic dispersion of DI. We find that local differences in health and income levels are about equally important in determining geographic differences, with living-cost differences also playing an important role. The DI program redistributes across space, delivering ex ante welfare gains more than twice as large to residents of counties at the 90th percentile in terms of DI receipt compared to counties at the 10th percentile. The place-based effects of DI are larger than most public policy initiatives designed to support local economic activity.
About the speaker
Tim is a Professor of Economics at Purdue University and a Research Associate at the National Bureau of Economic Research. His research focuses on the effects of social insurance programs, the economic determinants of health, and how to address risky behavior like illicit drug use and dangerous driving. He received a Ph.D. from the University of Maryland and also has degrees from Monash University and the University of Melbourne.