Hysteresis: evidence from the social security disability program during the jobless recovery
Date
2020
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
University of Delaware
Abstract
This paper studies the “hysteresis” in the SSDI (Social Security Disability Insurance) program from 1980 to 2016 by comparing different models using CPS (Current Population Survey) annual data with six million observations. The Social Security Disability Benefits Reform Act of 1984 is used as an exogenous shock to create a unique natural experiment. Using the difference-in-differences with instrumental method and fixed effects, it is shown that demographics, education, marriage, number of children, benefit premium, membership rule and structural shocks are causal to the degree of hysteresis. My findings provide an important implication for the conduct of monetary and fiscal policy.
Description
Keywords
Difference-in-Difference, Hysteresis, SSDI, Social Security Disability Benefits Reform Act